2024-09-17 City Council Work Session PacketCITY OF MENDOTA HEIGHTS
CITY COUNCIL WORK SESSION MEETING AGENDA
September 17, 2024 at 5:00 PM
Mendota Heights City Hall, 1101 Victoria Curve, Mendota Heights
1.Call to Order
2.Discussion
a.Local Affordable Housing Aid (LAHA) with Dakota County Community Development
Agency (CDA)
b.Police Department and City Hall Building Overview
3.Adjourn
Alternative formats or auxiliary aids are available to individuals with disabilities upon request.
Please contact City Hall at 651-452-1850 or by email.
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2.a
City Council Work Session Memo
MEETING DATE: September 17, 2024
TO: Mayor, City Council and City Administrator
FROM: Sarah Madden, Community Development Manager
SUBJECT: Local Affordable Housing Aid (LAHA) with Dakota County Community
Development Agency (CDA)
ACTION REQUEST:
No formal action is required. This is an update and brief presentation from Dakota County CDA
staff regarding housing programs.
BACKGROUND:
Tony Schertler, Executive Director, and Lisa Alfson, Director of Community and Economic
Development with the Dakota County Community Development Agency (CDA) will be making
a presentation on the Local Affordable Housing Aid (LAHA) program. The City Council is
invited to provide comments and questions on the information, and City staff will ask for the
Council's feedback and to gauge the level of support for entering into a formal agreement
with the CDA to help administer some of these new LAHA funds on the City's behalf.
In 2023, the Minnesota Legislature passed a housing bill with $1 billion in new funding for
various housing programs. The Legislature appropriated state funds for the programs and
established a metro wide sales tax for housing needs, including a portion of this tax as a local
housing aid for metropolitan cities. The new law establishes a 0.25% metropolitan regional
sales tax, with a portion of the proceeds allocated to metropolitan cities over 10,000 in
population. Mendota Heights will receive a distribution of aid under this legislation of
$43,876.81 in 2024. A spreadsheet showing the initial projected distribution of aid by city, for
2024-2027, is attached. It is expected that the amount will increase over time, because the
appropriations from this taxable revenue are only based on five months of sales (October-
February), shortening the collection time frame for the first year of implementation.
Cities can use this aid for:
•Emergency Rental Assistance
•Financial support to nonprofit affordable housing providers in their mission to provide
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safe, dignified, affordable and supportive housing
• Construction, acquisition, rehabilitation, demolition, or removal of existing structures for
homeownership (115% AMI or less) or rental (80% AMI or less)
• Financing (gap financing, permanent financing, etc.) for homeownership (115% AMI or
less) or rental (80% AMI or less)
*For a household of four, 115% AMI is $142,830 and at 80% AMI is $97,800 (2024 income guidelines).
Cities must spend this aid by December 31 in the third year following the year after the aid
was received. Beginning in 2025, cities must submit an annual report with documentation on
any unspent funds, and documentation of qualifying projects completed or planned. This
report will be due by December 1 of each year (starting in 2025) to the Minnesota Housing
Finance Agency.
In addition to Dakota County receiving its own share of LAHA funds, the CDA is proposing to
collaborate with cities on the use of their LAHA allocations. CDA staff has been working with
cities across Dakota County to understand the legislation and qualifying projects; and
discussed establishing a partnership in order to maximize the use of LAHA funds for affordable
housing programs with the individual communities. Through this partnership, three potential
programs could be administered on the City’s behalf:
(1) an enhanced Single-Family Home Improvement Loan Program;
(2) a Radon Mitigation Grant Program; or
(3) Preservation and New Construction Gap Financing program.
These programs build upon existing CDA programs and would be relatively easy to start and
administer. Information on these programs are included as attachments to this report. In April
of this year, the CDA Board authorized the Executive Director to partner with Dakota County
cities to administer LAHA dollars, and enter into formal agreements with cities, if requested.
The CDA is proposing that cities can select one or all three LAHA-eligible programs to be
administered by the CDA.
Considerations for the City Council:
1. Is the City Council supportive of partnering with the CDA to implement LAHA funding?
2. Does the City Council support collaboration with the Dakota County CDA on one or all
three of the programs listed above?
ATTACHMENTS:
1. LAHA Funds - Estimates May 2023
2. Enhanced Home Improvement Loan Program
3. Radon Mitigation Grant Program
4. Residential Preservation New Construction Gap Financing Program
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Project
Proposal: Enhanced Single-Family Home Improvement Loan Program
Project
Purpose:
Expand the existing CDA-administered Home Improvement Loan Program to
include additional Local Affordable Housing Aid (LAHA) funding. Please see
the attached brochure for information about the Home Improvement Loan
Program.
Project
Objectives:
1) Continue to improve the housing stock of Dakota County.
2) Expand existing program with proven results to more income-eligible
residents of County.
3) Provide cities and county with a way to use LAHA for an existing countywide
housing program.
4) Diversify funding resources for existing CDA program.
Project
Outcomes:
1) Increase number of homes improved from 60-70 per year to 115-120 per
year after Year 2 of new program.
Project
Details:
•Provide deferred 0% loans of up to $35,000 for home improvement projects.
•Home improvement projects prioritize health, safety, and structural integrity
issues.
o Common improvements include new roofs, siding, HVAC systems,
windows, building foundation or other structural updates, accessibility
improvements, kitchens and bathrooms(accessibility).
o Other improvements would be considered if they address health and
safety issues or otherwise improve the value of the home. Common
improvements are repairs or replacement of detached garages, kitchens
and bathrooms (non-accessibility), driveway replacement/repair
•Homeowners must be income eligible and meet other CDA program
requirements, e.g. own and reside in home, meet credit standards, be
current on property taxes, properties must be at least 15 years old, etc.
o CDBG funds require 80% AMI cap
o LAHA requires 115% AMI cap
•Have one application for homeowners; eliminates any confusion for
homeowners.
•Eligible HO with incomes at or below 80% AMI could use either countywide
and city CDBG and LAHA.
•Eligible HO with incomes between 81-115% AMI would use only countywide
and city LAHA as they are available.
•Program income generated from LAHA would be used for future home
improvement loans, similar to the CDBG program. CDA would track program
income and deposit into individual city accounts.
See attachments for
current AMI limits
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Project
Funding:
•Current CDBG entitlement funding totals $1,193,635 for FY 2023, which
includes cities’ and Dakota County CDBG allocated to CDA’s HO Rehab
program.
•CDA spends approximately $1,725,800 to rehab 70 homes in a fiscal year,
on average.
o Current CDBG allocation will fund about 37 loans at $32,000/ea.
o Program income from previous CDBG loans supports another 15 more
per year.
o Takes about 18 months to fully expend a year’s worth of CDBG and
program income.
o Funds are replenished annually, provided Congress funds the CDBG
program.
•Future LAHA – CDA estimates it could successfully deploy an additional
approximately $1,400,000 to rehabilitate an additional 55 loans per year after
first full year of additional funds.
•Individual cities contributing to program would have separate subaccounts
that will be tracked by CDA staff.
Project
Staff:
•Existing staff:
o 1 FT Rehab Coordinator
o 1 FT Rehab Advisor
o 1 FT PSA
o 2 Rehab Advisor contractors – each takes 5-7 files per year, total of 15
•Additional staff needed for LAHA funds: 1 additional FT Rehab Advisor
Project
Reporting:
The CDA would provide annual reports to participating cities and Dakota
County. The annual report would include the following:
o Community’s contribution to program that fiscal year
o Number of loans using LAHA
o Program income generated
Attachments: 1.CDA Home Improvement Loan Brochure
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Proposed
Project: Dakota County Homeowner Radon Testing and Mitigation Grant Program
Project
Purpose:
The average radon level in Minnesota is more than three times higher than the
U.S. radon level. This is due to our geology and how our homes operate.
Minnesota homes are closed up or heated most of the year, which can result in
higher levels of radon. In Minnesota, more than two in five homes have radon
levels that pose a significant health risk. Exposure to radon over a prolonged
period can lead to lung cancer. Minnesota Department of Health website
The Environmental Protection Agency (EPA) has set the action level at 4 pCi/L
(picocuries of radon per liter of air). The Minnesota Department of Health
recommends installing a radon mitigation system when the radon level is at 4
pCi/L or higher. Between 2 and 4 pCi/L, a radon mitigation system should be
considered to lower the level as much as possible. The average indoor radon
level in Dakota County is 3.6 pCi/L as determined by radon test results from
AirChek, an at-home radon testing company. There is no safe level of radon in
a home.
The proposed Homeowner Radon Testing and Mitigation Grant program would
provide free testing services to income-eligible residents, and would provide
free mitigation services for those income-eligible residents whose homes have
radon levels greater than 2.6 pCi/L. A lower radon level was chosen as the
benchmark in order to reduce radon levels in existing homes as much as
possible.
Project
Objectives:
1) Continue to improve the housing stock of Dakota County.
2) Reduce potential future risk of lung cancers in Dakota County residents.
3) Provide cities and county with a way to use Local Affordable Housing Aid
(LAHA).
Project
Outcomes:
1) Test at least 40 homes in Dakota County for radon per year.
2) Install radon mitigation systems in all homes assessed for radon with levels
greater than 2.6 pCi/L per year, subject to available funding.
3) Reduce the number of homes with high radon levels. Mitigation systems
would be required to reduce radon to < 2.0 pCi/L.
Project
Details:
• Provide grants to assess for and mitigate radon when levels are 2.6 pCi/L or
greater.
• Homeowners must own and reside in home, be current on property taxes,
and be income eligible.
o CDBG funds require 80% AMI cap
o Sales tax funds require 115% AMI cap
See attachments for
current AMI limits
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•Homeowners who qualify for CDA Home Improvement Loan, MHFA RLP
Loan, Energy Assistance, Weatherization automatically will be eligible for the
Radon Grant Program.
o Homeowners would need to sign a grant agreement if they are recipients
of the above-listed program.
•Homeowners who do not qualify for the above-listed programs may apply for
the Radon Grant Program with a separate application.
o A separate application process will be developed if this program is
established.
o Homeowners would need to sign grant agreement.
•Homeowners will solicit bids from two licensed mitigators; CDA will evaluate
bids for cost reasonableness.
•CDA will pay mitigators upon completion of project and satisfactory
clearance test numbers (< 2.0
Project
Funding:
•Funding exclusively through LAHA funds.
•Estimate program would need $200,000 per year to assess for and install
radon mitigation systems in 40 homes.
•Individual cities contributing to the program would have separate
subaccounts that will be tracked by CDA staff.
Project
Staff:
•The Radon Mitigation Grant program would use existing CDA staff. No
additional staff would be needed.
Project
Reporting:
The CDA would provide annual reports to participating cities and Dakota
County. The annual report would include the following:
o Community’s contribution to program that fiscal year
o Number of grants using LAHA funds
Attachments:
1.EPA Radon Zones Map
2.EPA Radon Risks Chart
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Radon Zones Map
The U.S. Environmental Protection Agency (EPA) created this map to identify areas with the potential
for elevated indoor radon levels. The EPA Map of Radon Zones helps national, state, and local
organizations implement radon-resistant building codes. The map should not be used to determine if a
home in a given zone should be tested for radon. Homes with elevated levels of radon have been found
in all three zones. All homes should be tested for radon.
What do the colors mean?
Zone 1 (red zones) Highest potential; average indoor radon levels may be
greater than 4 pCi/L (picocuries per liter)
Zone 2 (orange zones) Moderate potential; average indoor radon levels may be
between 2 and 4 pCi/L
Zone 3 (yellow zones) Low potential; average indoor radon levels may be less than 2
pCi/L
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12 A Citizen’s Guide to Radon l THE GUIDE TO PROTECTING YOURSELF AND YOUR FAMILY FROM RADON
THE RISK OF LIVING WITH RADON continued
RADON RISK IF YOU SMOKE
It’s never too
late to reduce
your risk of lung
cancer. Don’t
wait to test and
fix a radon
problem. If you
are a smoker,
stop smoking.
Note: If you are a former smoker, your risk may be lower.
RADON RISK IF YOU’VE NEVER SMOKED
Note: If you are a former smoker, your risk may be higher.
*Lifetime risk of lung cancer deaths from EPA Assessment of Risks from Radon in Homes (EPA 402-R-03-003).
**Comparison data calculated using the Centers for Disease Control and Prevention’s 1999-2001 National Center for Injury Prevention and Control Reports.
Radon
Level
If 1,000 people who
smoked were exposed
to this level over a
lifetime*. . .
The risk of cancer from
radon exposure compares to**. . .
WHAT TO DO:
Stop Smoking and. . .
20 pCi/L
10 pCi/L
8 pCi/L
4 pCi/L
2 pCi/L
1.3 pCi/L
0.4 pCi/L
About 260 people
could get lung cancer
About 150 people
could get lung cancer
About 120 people
could get lung cancer
About 62 people
could get lung cancer
About 32 people
could get lung cancer
About 20 people
could get lung cancer
250 times the risk
of drowning
200 times the risk of
dying in a home fire
30 times the risk of
dying in a fall
5 times the risk of dying
in a car crash
6 times the risk of dying
from poison
(Average indoor radon level)
(Average outdoor radon level)
Fix your home
Fix your home
Fix your home
Fix your home
Consider fixing
between 2 and 4 pCi/L
(Reducing
radon levels
below
2 pCi/L is
difficult)
Radon
Level
If 1,000 people who
never smoked were ex-
posed to this level
over a lifetime*. . .
The risk of cancer from
radon exposure compares to**. . .
WHAT TO DO:
20 pCi/L
10 pCi/L
8 pCi/L
4 pCi/L
2 pCi/L
1.3 pCi/L
0.4 pCi/L
About 36 people
could get lung cancer
About 18 people
could get lung cancer
About 15 people
could get lung cancer
About 7 people
could get lung cancer
About 4 people
could get lung cancer
About 2 people
could get lung cancer
35 times the risk
of drowning
20 times the risk of dying
in a home fire
4 times the risk of
dying in a fall
The risk of dying in a
car crash
The risk of dying
from poison
(Average indoor radon level)
(Average outdoor radon level)
Fix your home
Fix your home
Fix your home
Fix your home
Consider fixing
between 2 and 4 pCi/L
(Reducing
radon levels
below
2 pCi/L is
difficult)
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Project
Proposal: Residential Preservation and New Construction Gap Financing Program
Project
Purpose:
Expand the existing CDA-administered gap financing resources for residential
multi-family and single-family preservation and new construction to include
Local Affordable Housing Aid (LAHA) funding. The CDA currently administers
other gap financing tools such as the Dakota County levy-funded HOPE
Program and federally-funded HOME Program.
Project
Objectives: 1) Continue to improve and add to the affordable housing stock of Dakota
County.
2) Provide cities and county with a way to use LAHA for an existing countywide
housing program.
3) Increase and diversify gap financing resources.
Project
Outcomes:
Currently the CDA is providing gap financing to an average of two - three new
construction multi-family projects and an average of three - four single-family
projects (both new construction and preservation).
Project
Details:
The CDA is fortunate to have a variety of affordable housing finance
resources including the annual Low-Income Housing Tax Credit allocation, an
annual tax-exempt bond allocation, and gap finances including the locally-
funded HOPE Program and the federally-funded HOME Program. With this
level of resources, the CDA is typically aware of any potential, significant
affordable housing developments that are looking to come into Dakota
County.
The CDA has staff who work regularly with developers from concept to fully-
financed and constructed affordable housing developments, both
preservation and new construction, throughout Dakota County. The CDA has
in-house knowledge and expertise on underwriting these projects.
Cities may allocate LAHA funds to increase the amount of gap financing
available in their communities for preservation and new construction. Cities
can rely on the CDA’s underwriting capabilities to structure these complex
financial deals on the behalf of their LAHA dollars.
The details on how the LAHA dollars will be structured in a preservation or
new construction affordable housing project will need to be determined, but
initial thoughts are the structure would mimic the primary gap funding source
(i.e. HOPE, HOME).
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Project
Funding:
• The CDA Board of Commissioners has traditionally allocated $1.5 million of
HOPE funds annually to provide gap financing to two multi -family projects.
• The CDA also administers the HOME Program that has approximately
$800,000 annually for gap financing to support preservation and new
construction residential projects.
• Future LAHA – The CDA will work with cities to identify multi-family and
single-family residential projects that need gap financing.
• Individual cities contributing to the program would have separate
subaccounts that will be tracked by CDA staff.
Project
Staff:
• Existing staff:
o Housing Finance Manager
o Community Development Coordinator
o Director of Comm & Econ Development
• Additional staff needed for LAHA funds: None.
• Cost to City Partners: Nominal admin fee.
Project
Reporting:
The CDA would provide annual reports to participating cities. The
annual report would include the following:
o Community’s contribution to program that fiscal year
o Number of projects that received LAHA gap financing
o Details of projects including: number of units, income limits of
units, details of loan terms, etc.
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2.b
City Council Work Session Memo
MEETING DATE: September 17, 2024
TO: Mayor and City Council
FROM: Cheryl Jacobson, City Administrator
SUBJECT: Police Department and City Hall Building Overview
ACTION REQUEST:
Staff will provide a general update and discuss the continued assessment and development of
plans for the expansion and renovation of the city's municipal campus which includes the
police department and city hall offices.
BACKGROUND:
ATTACHMENTS:
None
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