Housing & Redevelopment Authority - Regular Meeting

🎵 🎵 Thank you. Thank you.

Thank you.

Thank you. © transcript Emily Beynon Thank you. Thank you. Thank you.

Roll call, please.

Bowie? Here. Coleman? Here. Jost? Here. Kim? Naker?

Here.

Yang? Here. Chair Johnson?

Here.

There are six present and one absent, that being Commissioner Kim. Item number one is RES 26-1173, approving and authorizing the CDBG loan amendment for TWV Limited Partnership District 3 and 5, Wards 2 and 5.

All right, so we did receive a staff report on this at the last HRA meeting. These next couple items will move a little bit quicker in nature, only because we want to leave time for some of the other items, and we're starting a little bit late. But sometimes conversations are a little bit more important than bleed over. So with this item itself, we did receive a staff report on this item last time. Are there any questions related to it before we take a motion? Director McMahon, is there anything you want to add?

No, just a reminder that the action before you today is approving the amendment to the existing CDBG loan agreement and then authorizing execution of loan documents as necessary.

All righty. I'll take a motion from Commissioner Naker to approve. All those in favor?

Aye. All opposed? Six in favor, zero opposed. Resolution is adopted. Item number two, RES 26-1174, resolution amending the business assistance fund BAF guidelines citywide.

And to contradict my last statement, this one we did not receive a staff report on last time as it's a new item in front of us, but I do see Assistant Mayor Sumo Langer coming up, and I know the Council President has also been involved. So welcome, Assistant Mayor Sumo Langer. Thank you, Chair Johnson. Commissioners?

So the item before you adds three words to the Downtown Vitality Fund's economic development pool within the public realm improvement aspect for eligible uses. It adds the three words skyway access improvements. I'd defer to Council President or Commissioner Naker to talk a little bit about this, but I'll just note that the philosophy behind public realm improvements as an eligible use does contribute directly to the vibrancy of downtown and that interoperability between buildings and streetscapes and vice versa. So the other items under public realm improvements are lighting, outdoor seating, and public art, and Skyway access does help kind of get that street level to all different of our wonderful buildings connected to the Skyway.

Thank you, and thank you for being here and making the time. Commissioner Nate Gurriel.

Thanks, Madam Chair. Thanks so much, Assistant Mayor, for your hard work on this as well. This is something the Assistant Mayor and I have been working really closely on. We've been hearing consistently and vociferously from downtown constituents that restoring Skyway access throughout the system is critical. It is an amenity that people move downtown for. It is essential for those who have mobility challenges. In the heat that we were just experiencing yesterday, two days ago, and that we'll come back, and the cold that we experienced in the winter that it's hard to remember right now, the Skyways are absolutely essential. So we've had the central portion of our Skyways through Central Station, the Athletic Club, and the Alliance Bank Building cut off for too long. And it's become clear that we need to restore that access. That does come with funding challenges, in part due to the need to secure some of the businesses that are adjacent to the Skyway, especially in the Alliance Bank Building, the need for additional cameras and other physical changes. So the Downtown Vitality Fund, as the Assistant Mayor mentioned, is the perfect source for this because Downtown Vitality absolutely relies on having a, as the Assistant Mayor says, double-decker approach, including the Skyways. So we think this is completely aligned with the goals of the fund. It's just unfortunate that we left out these three little words, Skyway Access Improvements, when we first created the fund. So with this change, we will be freeing up the capacity for those who are interested in making Skyway Access changes to apply and receive that funding, and for us to restore Skyway Access in the near term.

And just for clarity for folks who are getting caught up to speed, our business assistance fund guidelines encompass the Downtown Vitality Fund. So that's the only reason why I didn't say changing the Downtown Vitality Fund guidelines. I'll just share that having reviewed it and also been in some of the conversations, I also am supportive of adding Skyway access improvements to Downtown Vitality. I think it is a major part of it. I know that Just being able to walk through the skyways has been something that a lot of folks are waiting on, including myself. So I appreciate the guideline pieces. Are there any questions for either our Assistant Mayor Stumer-Langer or Commissioner Brewe?

Thank you, Chair Johnson. Not a question, but first I want to just make a comment. I think this is really thoughtful. I also support it. I know when I saw it, I was like, wow, this is good. I'm happy to see this use of funds to help strengthen and improve our skyways. You know, as someone who worked downtown and I also enjoy coming downtown, I'm excited to start utilizing our Skyways more and just getting back to all the things that I used to love about our St. Paul downtown. I have a quick question. And you know, it's not a candid question but particularly just for clarity um i know it says in the improving skyway system but i just want to just make sure not to be confused with like expanding skyway system i know that's probably a much larger conversation but um i'm just curious to know if we ever explored um the the potential of either these funds or even a process if if a business or a property owner would like to expand connectivity through our Skyway system?

Commissioner Decker. So I think a great question, Ms. Booley, and thank you for your support. While I think technically this language could encompass adding to our Skyway system, That would likely be at the cost of far beyond what our entire Downtown Vitality Fund could afford and also would require action by the Skyway Governance Advisory Committee and the City Council to add to the Skyway system. So this is part of our Downtown Vitality Fund. Anyone can apply to that fund. But I think that an application to actually add to the Skyway system would run into a lot more regulatory barriers, and it would be something we would prioritize.

A quick little follow-up, because you learn something new every day as a commissioner and a council member. Can you talk a little bit more about the Skyway Governing Committee? That's the first time I've heard about it.

Thanks, Ms. Bowie. Yes, it's a committee of the Capital River Council, and it's responsible for making recommendations to improve policy changes in the Skyways, code of conduct in the Skyways, signage. They meet monthly, I think Fridays at 9 a.m., if I recall, if it's still happening then. So in our code, it's the body that actually regulates Skyways in the city. Thank you.

I also learn something new every day. I don't see any other questions from any commissioners, so I'll take a motion from Commissioner Naker to approve. All those in favor? Aye. All opposed?

Seven in favor, zero opposed. The resolution is adopted.

Thank you, Assistant Mayor, for being here. And I appreciate all the work for staff that have been working on the back end to figure this thing out. What seems like a very quick action took a lot of effort to do so. So I know this has been a long time in running. So special shout out to our city attorney, Sam, as well, for I'm sure the diligent work that the city attorney's team was doing on even making those few phases work and the guideline changes. Because we all know. You never get to see all the work that happens behind the scenes.

Item number three, RES 26-1175, resolution authorizing a three-year license agreement with Union Pacific Railroad for its exclusive use of HRA property at 43 East Water Street, District 3, Ward 2.

And if you all recall, this is the license agreement that we had between HRA Land and the Union Pacific Railroad that will be used for three years, potentially later on talked about as potential opportunities for a future city department. So right now, we're just making use of the space in a better way and hopefully getting some revenue from it. Seeing no further questions, just checking. All right. Take a motion from Commissioner Yang to approve. All those in favor?

Aye.

All opposed?

Seven in favor, zero opposed. The resolution is adopted. Item number 4, SR 26-143, Introduction to Redevelopment Project at 47 Douglas Street, District 9, Ward 2.

All right, so now we're into the staff report pieces of the agenda. This is an item that we have not had a staff report on yet, so I'll be looking forward to seeing it and hearing about this project, so Director McMahon, if you want to go ahead and introduce the staff that will be presenting.

Yes, Chair, Commissioners, thank you. We have Joe Mussoff here to present information on this redevelopment project at 47 Douglas Street. This is one, as you indicated, that the information will be presented today, opportunity for questions and The action would be before you for consideration at your next HRA meeting. Thank you, Director, and welcome, Mr. Mussoff.

Thank you, Chair Johnson and Commissioners. My name is Joe Mussoff. I'm an employee of the Department of Planning and Economic Development, and I'm here to introduce you to a matter that will be before you for approval, hopefully at your next meeting on August 5th. This is regarding the proposed rehabilitation of an HRA-owned vacant single-family house at 47 Douglas Street, also known as the Galvin Sheeran House. 47 Douglas Street is located in the Little Bohemia neighborhood. It is part of the West Seventh Fort Road Federation District Planning Council 9 and is in Council Ward 2. This home was built in 1883. at the corner of Harrison and Douglas and moved to its present location in 1912. Some very quick background. The house was donated to the HRA by Wells Fargo Bank in 2010. From about 2010 to 2015, right in that range there, within really like a two block radius of the location of 47 Douglas, There were eight HRA-owned homes that were rehabbed. There was one new construction single-family home built on a vacant HRA-owned lot. And two homes were moved on to new locations and rehabbed. So this is in the middle of a very concentrated, large effort that has been undertaken over a number of years of neighborhood stabilization and revitalization in this spot here. There were a few different partners in all of that work. But the West Seventh Fort Road Federation played the most significant role as developer of most of these homes. And the Federation was reluctant to take on 47 Douglas. It didn't really fit with their marketing goals. And so we offered it as an inspiring communities property through an RFP in 2014. And unfortunately, we received no interest at that time. So again, we offered it in 2015 through another RFP. And we did identify a developer at that point, but the developer couldn't follow through with the project. At that point, we suggested demolition of the property. But many neighbors, including some that are in the audience here today, rallied in support of saving the property and actually found us another interested developer. Once again, that deal didn't hold up. And now we get to 2020, and a local nonprofit, Historic St. Paul, submitted a proposal to us. This is approximately 1,000 square foot house on a very small lot. The lot is approximately 48 feet by 46 feet. Historic St. Paul proposes to reestablish the original floor plan resulting in a two bedroom, one bathroom home. Historic St. Paul will rehabilitate the home in a manner consistent with the Secretary of the Interior Standards for Rehabilitation, as if it were listed on the National Register of Historic Places. A quick note about Historic St. Paul. They are a St. Paul-based nonprofit with a mission to preserve and promote the cultural heritage, character, and vitality of St. Paul neighborhoods. And to that end, Historic St. Paul periodically takes on real estate development projects like this. A recent similar example is their rehabilitation of the John and Ann Lewis House nearby at 412 Goodrich. And there are a couple of representatives from Historic St. Paul with us here in the chambers today. This is an image of the Douglas Street facade, and you can see... It's missing the original porch, and the original lap siding has been covered. And this is... excerpt from the proposed rehabilitation plans showing the covered porch that Historic St. Paul intends to add onto the front of the house. And a reestablishment of the primary entrance will be on the Douglas Street side. Just two other quick images. This is the north elevation proposed showing the porch extending to the Douglas Street side. And then this is admittedly a tough graphic to see, but I... I just wanted to give you an idea of the floor plan. Again, this will result in a two bedroom, one bathroom home, a small home, approximately 1,000 square feet. In 2021 and 2022, the HRA Board of Commissioners approved the sale of the property to Historic St. Paul. and approved investment of $225,000 to subsidize the rehabilitation. Since that time, the project has been delayed due to Historic St. Paul's loss of commitments from two different general contractors. The organization also transitioned through a leadership change and this delay has resulted in increased construction costs. But Historic St. Paul has offset much of the increase with securing additional commitments from Minnesota Housing Finance Agency's impact fund. Historic St. Paul is requesting an additional $29,961 of development subsidy, bringing the total development subsidy ask of the Housing and Redevelopment Authority to $254,961. On the left-hand column, current ask, here's the proposed development budget. Total development cost will be $594,000, with an anticipated sale price of $235,000. Minnesota Housing Finance Agency has committed $105,000 to the project, and the HRA has requested to contribute $254,961. PED's resource team has identified Community Development Block Grant as the best source of funds for this project. This will be provided to the developer per the Inspiring Communities program design as a forgivable loan. In addition, also consistent with the Inspiring Communities program design, the future buyer will be eligible to receive up to $5,000 in down payment assistance. HRA's investment in this project will exceed $250,000. Therefore, city council procedure of project labor agreements is applicable. Our standard process was followed, and staff recommends non-use of project labor agreement. This will require a city council action, and that will be brought to city council in conjunction with HRA's action two weeks from now. And then my last slide, just a summary again that in two weeks, We'll have an action before you to consider requesting that you reconfirm the authorization to enter in a development agreement with Historic St. Paul, authorized gross development gap contribution in the amount of $254,961. And then because this is CDBG, there's an administrative action that needs to happen correspondingly with the city council through something called an administrative order. And the city council must ratify the recommendation for non-use of PLA. That's the end of my presentation. I'm happy to take any questions.

Commissioner Baker.

Thanks, Madam Chair. Mr. Mussoff, thanks so much for the presentation and for all your hard work on this. I am so excited to see this coming in front of us for action. I think you and I toured this home 10-some years ago. And it has been clear since then that the neighborhood deserves reinvestment in this property and that it needs to be preserved. So I'm really grateful that we're in this place. I want to thank the neighbors who are here today who've advocated for this home over many, many years. And huge thanks to Historic St. Paul for sticking with it and sticking with us. Just two questions. So if you can't tell, I'm in serious support of this. But two questions. One, just can you remind us, I think we had confirmed that with this additional This will be the last investment, and that Historic St. Paul is then ready to commence construction. And I just want to clarify that this is it, and we are at the finish line, and there will not be further delays. And then also, can you remind us who an eligible buyer would be? What are the eligibility criteria?

Thanks, Chair Johnson and Commissioner Nacre, especially for that second question. I should have mentioned that in my presentation. Let me address that first. Historic St. Paul will be required to sell this home for owner occupancy to a household whose income does not exceed 80% of the area median income. And to your question regarding is this ready to go, the answer is yes. And they can break ground. Break ground is not the right term for rehab, excuse me. They can commence the rehabilitation this fall. Thank you.

Commissioner Coleman.

Thank you, Chair. This is very exciting, very supportive. I have a quick question. I just haven't seen, I don't think since I've been a member of this body, the non-use of PLA recommendations. So I'm wondering if you could say a little bit more about how we got there and why that recommendation.

Chair Johnson and Commissioner Coleman. The city's PLA policy is that if investment exceeds $250,000, there is a protocol that we shall follow which requires notification of interested parties. that this project is likely going to commence and whether there is a recommendation from any interested parties that a project labor agreement should be considered or not. We receive no response, and therefore our recommendation is no project labor agreement.

Go ahead, Commissioner Coleman.

Just a quick follow-up. Those interested parties are building trades, unions, all of the above, anybody else?

That's right. The notification list, we can share with you, but it's the building trades.

No need to share.

That's all I want to show. Thank you.

And then, Mr. Meself, can you talk a little bit about the HRA-funded down payment assistance as comparison to the city down payment assistance program?

I apologize, but could you say that one more time?

Yeah, the HRA will provide up to $5,000 in down payment assistance to the buyer. Can you just either differentiate, or is that within the city's down payment assistance? It says it's HRA funds, so just trying to figure out. I think that might be the first time I've seen that in a while.

I understand, Chair Johnson, and thanks for repeating the question. Okay. The $5,000 of down payment assistance, while it is certainly useful from a marketing standpoint to move the property once it is for sale, our primary motive is to use that down payment assistance as a way to enforce owner occupancy and thus the initial affordability period for five years. So those dollars are structured as a forgivable loan, forgiven over those five years. But a portion would be due back if the owner sells the home or fails to occupy it in owner occupancy for those five years. The source of those dollars is from our small scale development inspiring communities program.

OK. And I guess I'm more so wondering why that wouldn't be from the down payment assistance program.

Chair Johnson, it wouldn't be because this is specifically tied to an inspiring communities outcome. So it's a piece of the inspiring communities program design that there's an associated down payment assistance connected in part to helping us enforce some period of owner occupancy and affordability. And it's funded through the Inspiring Communities budget.

OK. All right. Thank you. Are there any other questions for Mr. Musso? I know that you said that Historic St. Paul is here. Members from the organization, there was a question just around this being it and whether or not they'd be able to go forward with the development. So I'd take this time to just welcome up someone from Historic St. Paul to just share if you would be able to move forward if you receive the subsidy and just what your timeline is currently for the project. If you wanted to come and talk to that, I'm willing to let you come in for a few minutes before we transition to the budget to actual presentation.

Hi, I'm Carol Carey, and I live at 635 Bates Avenue. I'm working with Historic St. Paul on the completion of this project that was started a number of years ago. After a lot of stops and starts, We were very happy to hear from Joe over the summer that it looked like we were pointing all in the same direction. And so over the past couple of weeks, I've taken the time to meet with our construction lender and been in communication with our general contractor to make sure everything was in place to move forward.

Wonderful, Ms. Carey. Thank you so much for being here. And thank you to members that are here from Historic St. Paul, too, and your investment in the city.

And as long as I appear, I really want to reiterate that we wouldn't be here today if it wasn't for the extraordinary effort of Joe and also the inspiration and advocacy of the local community. They've kept us engaged.

Well, thank you so much. Yeah. All right, so this item will be in front of us on August 5th. Thank you so much, Mr. and Mrs. Swift, for being here.

Okay, thank you, commissioners.

Item number five, SR 26-144, second quarter budget to actual report.

It's that time again where we have our budget to actuals for quarter two, so I'll welcome up Deputy Director Green.

Good afternoon, Chair Johnson, commissioners. It is great to be here today. My name is Nicole Green. I am the chief financial officer, thank you, and deputy director for the Department of Planning and Economic Development. I am here today as part of the action that was taken last year in December to ensure that we were providing quarterly budget to actual reports to this body. So thank you. I appreciate the opportunity. And let's get started. First, I want to just recognize and extend my sincere appreciation to the PED accounting staff, OFS leadership, especially the coordination and cross-functional support that we've had from CFO Director Joe Harney, Council Budget Officer Verma, thank you, and our newly installed, permanently installed, for the department, Melanie McMahon. Thank you all. It is that cross-functional coordination that is super, super important. Our job on the finance side is to provide accurate, and objective decision support information in a timely fashion. We rely on the understanding of leadership, our understanding of leadership's capacity, perspective, and approach to guide the development and presentation of that information. And so we constantly seek cross-functional confirmation alignment and consensus across our leadership body. We have been in transition and interim stages for quite some time. And for Director Verma and Director Harney and myself, the engagement, especially in the second quarter, kicking off what we know is going to be a long-term commitment to improving our current processes and answering a lot of the questions, addressing a lot of the concerns that you have. So I'm super, super excited as well as appreciative for them. And then also just wanted to say, having completed our initial quarterly update in April, we are continuing to learn. and improve this reporting process. It's exciting for our staff, our division leaders, Jules, Jimmy, Yasmin, and all of our program staff to be engaged in the process, to have their assignments, and to challenge what we know and how we manage our finances. So I appreciate their commitment as well. And as a reminder, the financial information we'll review today And all of the information that you all received throughout the quarter and included in this presentation is preliminary, estimated, and unaudited. So thank you for your patience as we continue to work through that as well. You see here our new staff that have been added within the accounting department. I just want to also recognize them. Samantha Parsons, an Accountant 3, Accountant 3, and our Accounting Tech Chancellor, Fat Lor, who has specifically joined our team in relation to our emergency rental assistance work. We're excited for them. And I also want to bring attention to the fact that in Q2 we've made significant progress on updating our Northridge loan servicing software system and also moving through the parking operator RFP. And I won't go through the priorities, but I just want to make sure that I extend our deep appreciation for the strategic memos received and obviously in the mayor's budget address. That information informs our staff and partners of the interests and objectives of the administration and council. These priorities have... deeply driven the conversation, the program planning, and the budget development that we've had throughout 2026. So specific to budget development, we are continuing to increase awareness and engagement from our staff and division leaders and including these objectives and those instructions and our instructions for their work on the spend plans and work plans that you all receive. So thank you for documenting, taking the time, and making sure that everybody's clear and aligned. And then just a little bit of background here, and I don't think we talked about this in the first quarter, but just want to continue to emphasize that PED is most significantly funded through our special funds. We have about, our total budget is about 4.6% of the city's overall budget, but our general fund budget receipts, our general fund portion is less than half a million dollars. So I just want to let you all know that and continue to reiterate that Our access to the special funds deeply supports the work that we do. And also the other funds like LAHA, City General Fund, Star, and HUD grants really supports the work that we do as well. And those are the best options for the work that we do and align with the work of the HRA. This report, I think this slide probably needed some more updating, so I apologize for that. But I want to kick it off since April what we've done in terms of providing the first initial quarterly budget to actual report. We've established consistent coordinating meetings between PED, OFS, and council, council HRA budget directors. And also we are exploring and considering various options and opportunities available to ensure administrative and council objectives and priorities are met. From an accounting perspective, this is really important because in addition to the objectives that you all have documented, as we review those objectives, what is important for us from the finance side to think about what we've already began discussions on are improvement of our financial reporting timelines, Two, alignment of financial reporting systems to consistently provide up-to-date and up-to-the-minute decision support reporting for various stakeholders, including you all and the administration. So those conversations are really starting to pick up. And that's the question that I know that you all have been asking since I arrived in the fall of 2024. And so I'm excited about the progress that we've made just in the last three months to that end and those very specific three perspectives that we're talking about. While we are all deeply immersed in learning about our existing operations, for Joe and Kamud and I specifically, we're new. And so... We also are doing that while we're managing the day-to-day requests that are coming from you all in the administration and public actions changes, news items as well that we have to contend with. So we're committed to making time to advance and improve industry best practice in this work that we're doing. And this item is a repeat from the first quarter. And I just want to clarify or provide a little bit more context here. In Q1, we had the mayor's address and memos from the council. supportive of the coordination of the work that we did. And so formatting of the reporting that you all receive through Q1 continues to prove helpful. And in our second installment, we're learning more and hearing more feedback from you. And so please continue to provide that feedback so that we can update the reports that you receive and improve the information. In Q2, as I just talked about, the work of the coordinated priorities, that is becoming more clear. And we're getting more in-depth exploring that work as well. And in Q3, we're working with OFS to learn about our systems and processes. And that information happens on a daily, weekly basis. We're challenging ourselves and our staff to be clear in how confident we are and can and should be in what we've always done and what we're currently doing. Where we're not confident in what we've always done and what we're currently doing, we have to have the courage and commitment to resolve and establish those realistic timelines in order to move forward. So that's the operational work to make sure that the budget to actual reporting is smooth, timely, and accurate. So now the actual budget to actual information. So we always start with our major programs, because that is what you asked us for, more information on the programs. And so what is not included in this report is PED operations, which is about $15 million annually. And that is deeply funded by the HRA levy. It's not included on this program perspective. So I just want to make sure that we are all aware of that cost as well. But in our major programs, what we have been able to do in working with our division leaders and our program leaders is to continue to look at and assess the actual activities, some of which Joe just mentioned, 47 Douglas, and to plot that out, plan that out in the time that we're going to need it. So I want to call your attention to the first column here, because it includes not only the budget allocated in 2026, but what we wanted to do was to make sure that you all had access and understood the prior year, the previous year's funding that was available. Sometimes we have to ask for it to carry forward, and sometimes it's a natural carry forward, depending on the source of that funding. And so what has been difficult for us in these conversations with you all over the years is the access or the need to spend down the prior year funding. And in doing so, and our team's working hard engaging that work, it has appeared at times for this body that the current budget allocations are not moving, that we're not spending any money. And we want to be clear that we are, but that we are, especially where there is a time constraint, where there's an expiration of funding, we want to make sure that we are responsible to that first. So the amended budget column in this presentation likely includes, especially for some of the larger items like down payment assistance, emergency rental assistance, and commercial corridors, inspiring communities. Maybe not commercial corridors. But inspiring communities definitely includes that prior year funding. And folks have a plan. And you've received that information. So I encourage you to look at that, because that is attached to specific properties. It is attached to detailed work. And our team has been really good and making sure that we get that information to you.

And Deputy Director Green, I just wanted to share a couple of things as I was going through this. Director McMahon, can you speak to the $20,000 overage in full stack and how that's being projected higher? That was the only one that was projected over budget.

Chair, commissioners, my understanding from last year is that was carryover.

No, the allotted time for a full stack was $350,000, and it looks like their projected allocation is $370,000.

I actually turned to Deputy Director Green on that one then.

That item, I think we probably adjusted it. Again, we rely on the information from the program director. So I believe in this case, what we learned is there is interest or activity that could spend 370. And again, this is an iterative process for our staff. So what we do is go back and inform folks, hey, here's your sourcing. You have to stick to the sourcing. So while they may still be planning, right, and that our programs are oversubscribed, right, folks want more of what we're doing, while they may still be planning that, then this process allows us to have that conversation with them and to manage that to what it is. So it's a good example of where, you know, our leaders have said, hey, if you gave me, I could spend this amount. And this report helps us to say, yep, that's great. We note it. and on the annual spend plan that they work from, they tell us, hey, this is a risk, right? The program spending, what I could plan, is more than what's available. And then we take that into account for the next year's budget review.

Okay. I think that is just really helpful when we're going through the line items. I have a couple of questions that maybe just didn't match my current understanding. I think part of it was the My understanding was the downtime vitality fund allocation was around $5 million, not $5.9. And I think it would be helpful to understand that piece a little bit better, too. But I think when it relates to any item, I'll just talk broadly, especially HRA items, I don't expect to see an individual program using HRA funds just go over budget without having some sort of board action. So if that was the case in that matter, we had a full-stack presentation in particular around that, where the presentation that was presented was $350,000, and that was an increase from prior years. And there was a little bit of ambiguity around, I think, what could be spent at that time, if I recall correctly. And I just don't want to make a habit of going over budget from what's given. And if that was the case where that was necessary, I would fully expect it to come to the board for approval prior to that happening, not on the back end. So just want to be very clear about that because that was something that caught me off guard a little. And also just in general, I just want to be clear in any project that it relates to regarding HRA funding, if that was the case or those were the numbers that we were going to see, part of doing this process is making sure that if we are going to go over, that that would be an item that I would fully expect to be brought to us for approval prior to doing so. Correct.

Correct. And as we improve the reporting, I don't think that you all have access to that now in the reporting that we provide, but there is a risk mitigation section where we're looking at this program as we have more need than we have funding. And so we're working with our program leaders and division directors to really be clear and open So we want them to tell us we need more funding. We want them to inform so that we can provide you that information that, hey, here's the information that we know from folks. So we'll continue to work on that. Thank you.

I saw quite a few different hands, so I'm going to try to remember the order. Commissioner Bowie, I think I saw your hand first. Commissioner Naker and then Commissioner Yang. Okay.

Thank you, Chair Johnson. I'll be quick here. And Deputy Director Green, please forgive me just in case you opened up with talking about the timeframe for what is particularly the quarter two. Because I'm just looking here at the program for the CDBG Acquisition Fund. um and just really just thinking about the time where we utilize this fund particularly in my ward for the saxon ford um if you can you know if is this the source um of that fund or is that a different one if we have actuals for that because i recall that was six hundred thousand dollars was the cost of the acquisition um which would have exceeded the amount that we have in here for $300,000, so I'm just wondering if that's the exact source, or if we are now, if that acquisition was during quarter three.

Thank you, Commissioner Bowie, Chair Johnson. I don't know the details of that specific project, but I can tell you with the CDBG, what you're seeing on this presentation, this report, CDBG, that award year for those funds begins in June 1st, I believe. So it's off cycle from HRA budget allocations. And so what you're seeing is the allocation. We receive that information usually late spring. We're not actually able to report on it. We give you an estimate in the first quarter. And then the second quarter, what you're seeing is what we know. We have been awarded for these particular CDBG items. And so I would say... I would, I'm guessing, and Director McMahon can add additional information on Saxon Ford, that was probably funded by previous year's allocations. It's not this allocation. OK.

Thank you. Yeah, that would be helpful just to know in terms of how we are tracking source of those funds. If it's not this year's award, I think it will be helpful as we're tracking and providing oversight that it's previous years. Thank you for that clarification.

Director McMahon or Ms. Lorenz, would you be able to provide any additional clarifications on whether that was last year funded or not? I saw a couple head nods from the audience, so I thought I'd ask. Chair, commissioners, yes. Okay. It was last year funding. So this year's $75,000 would be projected for what would be on a June, on a

We had access to it June 1st, and so they're planning those projects now. And if I remember correctly, those go through the city's CIB process, I believe.

Okay.

Wonderful. Thank you.

We're going to do Commissioner Naker, Commissioner Yang, and then we'll let you get through the couple slides on the revenue and then take any questions from those two. Commissioner Naker.

Thanks, Madam Chair. Deputy Director, could you speak a bit to some of the areas where it looks like there's going to be significant projected underspend? Looking at emergency rent assistance, familiar families pilot, which I thought we did something with. Maybe I'm misremembering. The HRA investment tracking system. Sort of ones where we expect to spend zero, I'm particularly interested in, and something like ERA, which we worked really hard to open up more dollars and I thought was seriously oversubscribed. I'm wondering if you can speak to those.

Thank you, Commissioner Naker, Chair Johnson. I'd love to speak to those. And I'll start with the zero spend. Those are transfers out to other departments, at least in the case of the familiar families and supportive housing. So the supportive housing we expect to update in Q3. We have been deep in conversations over the last three to four weeks in trying to solidify that. And so one of the approaches we've taken to this report is if we have it documented, what the plan is, if we have it documented, what we're doing, if we receive that official communication, then we want to put it on this report. But otherwise, since our staff are not involved, in the actual execution of the budget spend, we simply temper that. We don't know and we don't want to insert ourselves into their work. if you will. So that's why we're reporting zeros specifically on the supportive housing and the familiar families. So we work with the administration to get that information. And when we get that information from them and our other department partners or external partners, we will provide the update. But that's what that signals. It's not that the spending is not happening. It's that our staff are not deeply engaged in that spending.

And just as a quick note before you keep going, I appreciate that, and I think it's really important for this to be meaningful for us to have that information somewhere. We should be able to look at this and be able to tell with an asterisk or something else, just this is being spent, it's just being spent over here. Even recognizing that your staff may not know that information, but to to call that from the staff who do.

And the reason we call that out is because we don't have access in the system. So we really are trying to emphasize in the iterative instances of our quarterly to actual reporting the intense need that we have to be able to pull this information from the system. So this is kind of our effort to challenge our systems and to continue to highlight what we don't have from our system. So we appreciate your question, and that's exactly what we want, is those questions that we can go back and say, hey, we have to have this information, and we can't pull it from the system. And so we want to be accurate in our reporting. So thank you. That's exactly what we're seeking here. I would also say there are two programs that there are an asterisk, and those are asterisks because those programs are no longer operating. Again, that funding has carried. It's an automatic carry forward. It's carried forward, but we haven't been operating the programs for some years. So I think in our budget presentation coming up, In August, we will ask for or provide information that says, hey, we would like to officially close these programs so they're no longer showing on our budget.

And just to come back to the emergency rent assistance. Yes, sure. Why are we predicting such an underspend there?

Great question. Thank you, Commissioner Naker, Chair Johnson. That underspending, I just will remind the body that the program did not open the funding for 2025. I think there was $1 million in funding in 2025. That program did not open until December. And so what we spent earlier in the year was $1 million. we began spending on the prior year's 2025 allocation. So the full allocation of 1.8 is also showing here, and then the million dollars from the prior year. And so because the program was just getting up and running, we haven't had the staff. We reported that over a few different opportunities in front of this body. They are catching up to be able to spend that amount. So that's what we're looking at. That's why it's showing the lack of funding as they continue to staff up.

So we don't expect to be able to spend all of that down this year. We expect to have $1.4 million.

And what we will do, I think what we have explored with this body, what we're exploring with the administration, In our 2027 budget proposal, in our 2027 budget considerations, do we need to fund again at that same level while we have such significant amounts of prior year spending? So that has been part of our budget operations, part of the conversations that Director Verma, Director Harney, and I have been having. Director McMahon and I have been thinking about this since December of last year. How do we right size our budgets? so that we were able to spend the full allocation within the 12-month period that we've been given.

And are those conversations happening for Downtown Fatality Fund as well?

Absolutely. Absolutely.

Yeah, I think as we go through them, you know, too, and just some of the pieces, I think the staffing is also something that I would note for emergency rental assistance. It hasn't been actually more than a personal, like I think a full-time person in the last couple of months. So I would note that there as well. Commissioner Nunez, did you still have a question?

Thanks, Chair Johnson. I appreciate the budget to actual reports. I know that in the past few years, one of the concerns brought up was about healthy homes, power homes. We're really interested in getting those dollars out the door. So it's great to see that those dollars have almost been fully spent. I was wondering about the line item for district councils, because it also looks like it's close to being completely exhausted. Have we changed our system in some way for district councils? I thought at one point I heard from some of them that it's a reimbursement basis and so they would like to see that changed. Are we maybe giving the dollars up front now where we're being more flexible with the two?

I believe it's still a reimbursement basis. I couldn't speak directly to that. But what we are doing is representing to you here, the contracts have been executed. And in prior years, we have really struggled because of the compliance requirements, the deep compliance requirements, to even get the contracts executed. So I received a report within the last couple of weeks that all but four, I think, contracts have been completed. And so that is significant. And again, that's the work of the reporting and the questions and the engagement that we have with programs that we began those conversations early in the year, began planning right away in December after the budget was approved last year. So we were able to get those contracts in place. But I'm really excited about that. That's a great accomplishment to be able to have our contracts going. So they're spending, right? They can't spend until the contract is in place. And this is basic math and timing. So they're able to spend earlier. And then what you see here is based on our engagement with the district councils, and what we understand, it's what they expect to spend throughout the rest of the year. So that's what you're seeing is the projected actual. So they're saying, yes, we will get through this amount. The more detailed reports that you receive show you what is planned in the third and fourth quarter, and also in the first quarter of 2027 in closing out those contracts. So having that information for our accounting staff helps us to ask more questions and helps us to have the conversations strategically on our leadership team. How can we help? What can we do? That's what you're seeing here.

Can you explain a bit more about what all goes into those contracts? Does that pay for the executive director, money for them to do their programming work as well?

That's a great question. And I know Melanie's preparing a report right now. Yeah.

Chair, Commissioner Yang, you're actually going to be in early August receiving a presentation on district councils that provides not just the background, but also the funding. And in that presentation, we'll discuss in a little more detail about what a typical scope of work that this money funds for each district council. Thank you. But I'm happy to follow up before then as well. Thank you.

I do want to make sure that we have a little bit of a minute. So if you could just share the revenue and the special funds projected revenue piece of the presentation slides for us briefly here.

Absolutely. So what I really want to point out here is the reduction in revenues. And so again, this reporting process, this reporting request is really helpful to us in planning and reviewing what's available to us. So again, we've had a significant reduction in support from general fund. And everybody knows we've got a gap here. So that is what is represented in that number. And some of the larger ARPA funding has been significantly reduced. And on the loan repayments, we are working with St. Paul Minnesota Foundation to restructure an existing loan with one of our external partners. And so that's where you're seeing some reductions in revenue here. And the good news is we are able to make the adjustments in those programs.

I'm going to let her finish her slide here, because just as a time check, we are at 3. So I'm happy to take an additional question afterwards if we will go over.

Yep. Go ahead. Thank you, Chair Johnson. And lastly, on the projected revenues and expenses, what we want to show is for our special funds, Our planned expenditures significantly outpace our current receipts, and we've been discussing that for years. Our special funds are diminishing and depleting balances, and so we just want to continue to put that in front of this body. We will continue to welcome any opportunity to talk a little bit more about those details and talk about what we can do to improve or increase receipts to the special funds or adjust spending in those special funds so that we are no longer depleting them. But this is nothing new. This presentation, this information is not new.

Thank you. And so I will take a quick thing from Commissioner Naker and then I'll close us out.

Thanks, Madam Chair. Just on the point about revenue on the previous slide, I noticed that parking meter and fine revenue was predicted to be the same as was budgeted. I just want to make sure the department is talking to the police department and the parking enforcement team. The stats that I'm getting from our commander of parking and traffic enforcement, because of our investment in an additional parking enforcement officer last year in our budget, is that they have now already, in July, matched the number of parking tickets that they gave out all of last year in downtown alone. And we're halfway through the year. So I want to make sure that this is being informed by conversations with them, because it seems like, at least in some areas, our investments are leading to additional revenue.

That's great. Thank you for that information, Chair Naker. I appreciate that. We will definitely reach out to them. We don't typically do budget amendments for increased revenues, but we just incorporate them into our process and then try to anticipate what that increase would look like, whether or not it's ongoing or if it's a one-time increase. But Rhonda and I can continue to work on that and get that information included.

And not that an amendment would be necessary, but just in this document showing that projected would be higher if you think it will be.

Yep, will do. Thank you.

Yeah, I think that'll be really helpful. I feel like these last two slides are really imperative to the future of the HRA special funds overall, as well as the revenue that we are having and exploring. So that's really exciting about the Parking Enforcement Officer investments actually coming to fruition. I know that was one of the questions. And so those numbers I think will be really helpful to just have them accurately reflected in the future. and also just in general for the budget cycle and something to keep in mind. When I talk about the special funds and I also talk about the importance of doing things like minimizing our transfers outside of the special funds, this is kind of where it's stemming from. Just to make sure that we understand this slide, Deputy Director Green, The projected expenditures that we have, projected actuals right now of expenses are about $45 million, correct, in expenses. But the revenue that we're receiving is projected at about $37 million. And even if it was for what we actually budgeted every year, what we budget versus what we spend, even if you were to take the number and we received everything, my understanding, we would still be over $12 million. Is that correct? and what we would budget for expenses versus what we would most likely receive in the special funds. So in this case, we'd be still running a deficit of almost $12 million?

Correct.

So I just put that into perspective, because that's what's budgeted every year. If we did this practice with the city budget, this is quite the definition of what an in-balance budget looks like. Is that correct?

Correct. So we are trying to be transparent and open in our actual position, in our actual plan position.

Okay, thank you so much. I appreciate that. Thank you. Thank you for your time. I appreciate those pieces. We love accounting. We love the fact that you're here. I think hiring a CFO for the Planning and Economic Development team was one of the smartest decisions made by some of our leaders today, especially. And I hope that most departments thinks about that. So really appreciate the work that you guys do. I know that it's an entire team behind it. Director McMahon, thank you for your leadership, too, in ensuring that we were able to actualize this. With that, we are adjourned. Appreciate it.

Thank you.