06-11-2019 CCM Workshop (Joint HRA Board)HUTCHINSON CITY COUNCIL
SPECIAL WORKSHOP
MEETING MINUTES
TUESDAY, JUNE 11, 2019, AT 4:00 PM
CITY CENTER — COUNCIL CHAMBERS
Call to Order
Mayor Forcier called the meeting to order at 4:00 p.m. Members present were Chad Czmowski,
Mary Christensen, Steve Cook and Dave Sebesta. Others present were Matt Jaunich, City
Administrator, Jean Ward, HRA Executive Director and Judy Flemming, HRA Program
Coordinator.
DISCUSSION/REVIEW ITEMS
1. Joint Meeting with Hutchinson Housing and Redevelopment Authority Board
Introductions were made of HRA Board Members and City Council Members.
Jean Ward, HRA Director, presented before the group. Ms. Ward explained that the HRA's
intention is to provide information on housing and affordable housing in the City of Hutchinson.
Ms. Ward provided data on general occupancy vacancy rates, home resales, residential lot
availability, new dwelling units construction and foreclosures. Ms. Ward reviewed highlights for
2018 which include the opening of a second building in Highfield Apartments, HRA submitting
SCDP preliminary proposal to DEED for the rehab of 40 apartments at South Dale Apartments,
assisting eight owner -occupied properties with rehab funding and Park Towers Apartments again
achieving HUD high performer status in 2018. Also over $200,000 was invested in exterior
caulking and new appliances.
The 2019 rental development plans for general occupancy include the third and final 29 unit
building of Highfield Apartments is scheduled to open August 1, 2019; an additional 135 units is
scheduled to open spring to summer of 2020; Century Court Apartments has an approved site
plan of 84 units and is currently permitted to build three buildings of 12 units each. The 2019
rental development plans for senior housing include Woodstone planning an expansion of 38
units of senior independent living and Prince of Peach is considering an expansion of 10-12 units
of senior housing.
Priorities for 2019 including submitting a full SCDP rehab application for South Dale Apartments
for a total project cost of $789,286; assisting five first time homebuyers with affordability gap to
purchase newly constructed starter homes — current cost estimate of a starter home is $225,000;
obtaining a Capital Needs Assessment for Park Towers Apartments and evaluate feasibility of
repositioning from Public Housing to Project Based Rental Assistance; and continuing owner
occupied rehab programs throughout the City.
Ms. Ward noted that realtors predict for 2019 that the housing market for 2019 will be good but
maybe not as robust as 2018; new housing construction will continue to grow; the median resale
price will continue to rise but maybe not as much as 2018.
Ms. Ward then presented on a Rental Assistance Demonstration (RAD) Program. Ms. Ward
noted that the HRA owns and manages Park Towers Apartments which is a 101-unit hi -rise. Park
Towers is federally funded through the public housing program that provides operating subsidy
and capital funding with tenant rents at 30% of monthly adjusted income or a flat rent of $580 for
a one bedroom apartment.
Ms. Ward explained that RAD is a HUD program that will allow the PHA to convert properties
from conventional public housing with traditional capital fund subsidies and operating fund
subsidies to project -based Section 8 with a housing assistance payment contract. Ms. Ward
further explained PHA funding which are federal funds with an amount determined by a HUD
formula. Ms. Ward explained the HRA's capital fund program grants and public housing
operating subsidy information. Ms. Ward reviewed the Housing Assistance Payments which
mean when housing units are converted to RAD, the HAP is the payment made by HUD to the
PHA as agreed upon in the HAP contract; the HAP contract lasts for 15-20 years therefore
stabilizing PHA funding and securing inflation adjustments vis contract; at the end of the HAP
contract HUD invites the PHA to renew the HAP and the PHA must accept that invitation. RAD
will provide a stable and predictable project subsidy from HUD. RAD could also allow the PHA
to more easily seek other financing tools to renovate public housing. RAD creates greater
funding certainty while allowing increased operational flexibility for the PHA. With the RAD
program it locks in the current level of project subsidies in a Section 8 "Housing Assistance
Payments" contract with built-in annual increases that would address inflation; the units are
managed and operated under the Section 8 regulations; and it replaces HUD "Deed of Trust" with
a RAD "Use Agreement" so the PHA can borrow against the property to fund renovations. Ms.
Ward reviewed the steps required for a RAD conversion.
Judy Flemming, Program Coordinator, presented before the group. Ms. Flemming provided 2019
project updates. A major project for the year is the SCDP rental rehab for South Dale
Apartments. The estimated total project cost is $789,285.71.
Ms. Ward reviewed an employer survey that went out in May 2018 to manufacturing companies.
17 companies responded. Uponor said they feel they will be filling job openings with area
workers and there will be no new housing needs. 3M submitted the employer survey after the
workforce housing task force meeting and indicated that only rental housing will be needed.
Ms. Ward provided data on affordability rates for homebuyers. The information showed that a
household income of $55,000 can have a maximum mortgage of S173,234.81. Ms. Ward also
provided data on affordability rates for rental properties. Ms. Ward provided an update on work
done since the Maxfield Rental Housing Study was completed in 2012.
Ms. Flemming provided an update on homeowner rehab project updates from 2018. Projects
were done on homes on Golf Course Road NW, 5"' Avenue NW, McDonald Drive SW, Monroe
Street SE and Maryland Street NW. Projects for 2019 include homes on Hassan Street SE,
Jefferson Street SE, Southview Drive SW, Second Avenue SW, Sherwood Street SE and 1525
McDonal Drive SW. These projects are a mix of Live and Work, deferred grant program, grant
program and mobile home initiatives.
Items for the Council to consider include housing needs, when to complete the next update of the
Maxfield Housing Study and review housing development tools.
Motion by Christensen, second by Sebesta, to adjourn at 5:25 p.m. Motion carried unanimously.
ATTEST:
Gary T. Forcier
Mayor
Matthew Jaunich
City Administrator