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Economic Development Advisory Committee <br />October 11, 2023 <br />Page 2 <br /> <br />DRAFT MINUTES <br />Dahl said cities would have three years upon receipt of the money to spend it and stressed <br />that this is a “use it or lose it” type of program. Mr. Dahl said if the City establishes an <br />affordable housing trust fund and deposits the money. The money would then be <br />considered spent and would not need to be returned to Minnesota Housing. He stated that <br />the state statue allows Cities to set up this fund through an ordinance adoption. In doing so, <br />this stops the 3-year time limit to utilize the funds. Once the program has been set up, the <br />City will have to report to the state regarding what the program is, where the money is <br />being spent and who the recipients were. Mr. Dahl also suggested some ways the money <br />could be used are for administrative expenses, making grants or loans for home purchases, <br />repairs or upgrades, home buyer down payment assistance or eviction counseling. The <br />trust does not have to be limited to one program. Mr. Dahl also addressed ways to <br />replenish the fund, which is not a requirement of the program. <br /> <br />Mr. Kohler asked if the trust fund would be able to borrow to purchase a home. Mr. Dahl <br />said you could, but whoever moves on to the property or builds on the property will have to <br />meet eligibility requirements. <br /> <br />Mr. Hembre questioned if the trustee of the trust would be City Council? Mr. Dahl said it <br />would be or it could be assigned to an Economic Development Authority or Housing <br />Redevelopment Authority within the City. Mr. Dahl said there are other cities that have <br />established trust funds through special legislation and used existing TIFF monies to <br />capitalize those housing trust funds. In addition, they have levied a tax and transferred <br />funds to this fund. These funds are used for affordable housing and in new construction <br />and refurbishment. Those who meet the requirements will receive a no interest or low <br />interest loan. <br /> <br />Mr. Hembre asked if it was the City’s intention to go in the direction of rehabilitation of <br />homes? Mr. Grochala stated it was. He believes it allows us more flexibility and control <br />over spending the money. He said putting the money into a trust makes it beneficial to the <br />City to spend it on our timeline instead of the State’s timeline. Also noted, any interest <br />earned from the trust fund must go back into the trust fund. <br /> <br />Mr. Grochala said it may be beneficial to start off with a maintenance program then look at <br />more inclusionary housing later. This may be working with the developer to incorporate <br />into a development a certain percentage of homes designated to affordable housing mixed <br />into the development. Due to the cost of this, the City could offer gap financing if funding <br />were available and the program advances. <br /> <br />Mr. Vojtech questioned if any guidance was given from the legislature as to what the <br />money could be used for? Mr. Dahl conveyed only to attain the AMI threshold but nothing <br />specific. <br /> <br />Mr. Hembre wanted to know what the County would be spending their percentage on? Mr. <br />Dahl said they were going to strengthen the programs they have currently and look at new <br />programs that will also benefit the Cities. Mr. Grochala said the County has done a <br />comprehensive housing study and the results will be given in the next couple weeks and