Approval of Agenda

Council Member Scheid made a motion to approve the agenda as presented, supported by Council Member Feehan.

The question on the motion was called and the result of the voting is as follows:

            Ayes:   Council Members Miller, Meyers, Scheid, Feehan, and Gunderson

            Nays:   None

Public Comments

None

Consent Agenda

Reports by Council Liaisons

Council Member Feehan reported that he met with the Museum Board. They are in the process of doing carpet cleaning.  The back steps are in bad shape.

Council Member Miller said that at the Planning Commission meeting on June 26, all four exemptions they considered were approved. At the next meeting there will be two public hearings are set up. The Planning Commission continues to work on ordinances. We are looking for some additional clarification of the sidewalk policy. So, whether they put it together as the Planning Commission, or we work on it as a workshop here. It is a subject that needs to be further addressed so that we have a clearer picture of what that looks like for the future.

Council Meyers reported that the Rec Board met on July 9, at City Hall.  On June 21^st the Housing Commission met.   The Director’s report and covered a bit of the summary by Attorney VanEck and his request. Paid bills and had a work session on revised budget and voted to accept.  There was a ZBA meeting, but he was not able to attend.

Manager Niemela reported on the ZBA meeting. There were two requests for variances. One on Merrick Street passed three to nothing. The second one was on N. State, and that was voted on two to one. However, afterward it was discovered that the vote wasn’t legal as it didn’t represent the voting majority of the Board. So, a reconsideration meeting was held at which there were four members present, and the request was approved three to one.

Board Members Scheid had no meetings on which to report.

Mayor Gunderson had no meetings on which to report.

Unfinished Business

None

New Business

None

Work Session

1. Belding Housing Commission RAD Conversion discussion – Sharon Carlson

Sharon Carlson, Housing Commission Director, stated that a work session was requested by the Housing Commission. She gave brief information at the last City Council meeting, and asked Attorney VanEck to attend tonight to continue that conversation and to answer some questions.   

Councilman Miller said he needs to understand.  The property becomes under the ownership of the Belding Housing Commission.  Mr. VanEck said that under the Federal Government, there are a number of programs that low income housing fits in. The ones owned by local governments, like the City of Belding, are created by the local government, called PHA’s. Under PHA, the Belding Housing Commission is not permitted to use, even if it owned it, any of the real estate, improvements or anything else to finance in order to help fund their project. They are entirely reliant upon the Federal Government for assistance.  There are two parts:  One side is ongoing need just for operational needs.  The second side is capital funds which is updates for windows, for electrical, etc. Both sides of the funding are a disaster. Both are being cut and the Belding Housing Commission is starting to feel the pinch of all that. It is all discretionary money and if Congress can decide to not fund it if they choose.

Ms. Carlson added that the Department of Housing Urban Development holds a declaration of trust of which we are a party, and we are not allowed to convert to RAD program unless we owned the property.

Councilman Miller asked what would happen if we did nothing? Is it a fair assessment that the liability could it be more than we anticipate.

Attorney VanEck said when there is a deficiency, HUD could shut down and the owner of the property could foreclose.

Ms. Carlson said if they choose to, HUD can come in and change the Board and can hire a Management Company to take over.

Councilman Miller asked if RAD can provide money on-going.  Attorney VanEck said yes. It offers sustainability.

Councilman Miller asked about the well head and whether there is a solution or how the DEQ can handle that.  Attorney VanEck talked about the wells. They have to maintain what the City has.  Typically maintain an easement.  Councilman Miller asked what the greatest risk is for the City.  Attorney VanEck said if we stay on the present course with money drying up, the City or someone would have to step in.

Councilman Meyers brought up a twenty year capital improvement needs of a little over two million dollars. The initial deposit to replacement reserves is one hundred ten thousand, so that would already be budgeted into what is planned on getting through rents and everything. On top of that, would there be enough on the operational side?

Ms. Carlson said the financing plan has to demonstrate use of money. What the budget would need, fees, etc.

Attorney VanEck said that the Belding Housing Commission is not in a crisis, but must we look forward. What is the best plan? Otherwise, it could be in crisis mode in five or six years. HUD doesn’t let up on their oversite.  It switches from discretionary funding to contract funding.

Councilman Meyers asked would the market price be locked in now for over the twenty years or does it just continue.  Ms. Carlson said we locked in at 2016 market rent levels. We are entitled to the modification. Contract rents have already been raised this year. When the twenty year contract would end, it would automatically re-news. Attorney VanEck said the market rent does adjust on its own. 

Councilman Meyers asked about the choice mobility option and how is the budget set for every unit.  Ms. Carlson said we base it on 97% occupancy. It will be project based rental contract.

Councilman Meyers:  The operating and capital funds; where are they right now compared to other areas of State. Ms. Carlson said every agency is different. Operating fund is based on each agency property. Currently, it is based on 1971 which changed us to an asset based model.  Several things are taken into account. Each year she gets a spreadsheet with data regarding utilities, expense. Etc.  Councilman Meyers said so if you don’t get it, you find more funds? Ms. Carlson said we usually have to look where to cut. She said serious updating is needed to be done. They had to trim staffing down.  They are trying to figure out how to get the work done.  Councilman Meyers asked if the property ever gets foreclosed on, is Belding Housing Commission going to take out loans against the property, that those entities would not have recourse to get that money back, other than working through HUD itself, so it would remain the Belding Housing Commission.  Attorney VanEck said not exactly. They have numerous RAD conversions with the knowledge that if something fails for some reason HUD can come in to take care of it.  Ms. Carlson said banks take a very serious look at the contract issue we enter into with HUD before they will even sign on. Councilman Meyers said the Housing Commission Act had three descriptions. Attorney VanEck said that when the Housing Commission Act came out, it was an arm of the city government. In 1996, the government decided it wasn’t the best. City still has policy control, and they can require reporting, and the operating policy becomes Housing Commission.  City and Commission is getting along fine.  When the City owns the real estate, they are still responsible for the property and improvements. City owns the liability.  Ms. Carlson talked about the Commission and the Council needing to interact hasn’t been an issue. Things were operationally fine. They never had question of ownership until now because we don’t own the property so we can’t join RAD. Protections City has hasn’t changed.   Councilman Meyers asked about capital funds, and Ms. Carlson said that with RAD capital funds go away.  Councilman Meyers asked if RAD can move forward on select properties, such as Woodhaven, Hilltop, and Taft Court, but not include the Belhavens. Ms. Carlson said the way the applications are, Taft Court and Hilltop are one RAD application as they are family developments.  Belhaven 1 and 2, and Woodhaven are for senior and disabled residents, and is one application. Councilman Meyers asked about deadline for RAD and Ms. Carlson said yesterday was the deadline but they asked for an extension and granted one for 60 days. Councilman Meyers had questions on the well and if it doesn’t get resolved, should we still meet the extension deadline. Ms. Carlson doesn’t know for sure.  Attorney VanEck said the plan now is to do all of the housing.   Attorney VanEck said there are not too many choices. The government is pushing people into this.  Councilman Meyers said that under the Housing Commission Act “City would have the ability to determine whether the Commission would be authorized to incur mortgages or real estate”. He asked if that is the way it is now or will it change once the property is given to you.  Ms. Carlson said we can’t do a mortgage now as HUD wouldn’t allow.  Councilman Meyers asked what agencies have converted and what is their success rate?  Attorney VanEck said on the HUD web site there is information on that very question. Ms. Carlson added information on numbers of those converting.

Councilman Scheid what are the pitfalls? Ms. Carlson said very similar to what we have now. Reporting, learning a different program, getting office staff up to speed. Not much different operationally. It should be positive and stable. Right now with HUD they play with numbers and we don’t know the amounts. It would be more stable with RAD.  Once converted, the rents are the same. The residents get their same apartment, etc. Attorney VanEck talked about HUD taking it out of the hands of congress. The department wants their name off the declaration of trust.

Councilman Feehan said his concern is the well. Attnorney VanEck said if we don’t get answers from DEQ, we’ll keep going up. The well house situation can be taken care of. Ms. Carlson talked more, and sees this as an important time because all are on board now.  Attorney VanEck said we are working on it. Easements are just as good as ownership.

Mayor Gunderson said the appointment of the Board is by the City and wondered if that would change?  Ms. Carlson said as long as we remain a public housing commission, it would stay the same.  Mayor Gunderson ask what is the overall risk to the City, other than the well if the City does the program.  Attorney VanEck said the ultimate risk is malfeasance if the bank wanted to take the property.  Mayor Gunderson said would the City ultimately be responsible.  Ms. Carlson said that’s why HUD would remain in control and not allow people be displaced. Mayor Gunderson asked when the last time units were overhauled. Ms. Carlson said in 2009 they put roofs everywhere but Taft Ct. They did kitchens in Belhaven and Woodhaven.  Mayor Gunderson asked if rent will change for tenants if this program goes through.   Ms. Carlson said it won’t. The Board is to stay in place, and the staff in place. Attorney VanEck said they are not dealing with changes in that. Mayor Gunderson said this is at the forefront, and people don’t always dig into it. The main concern of his is the well; who would be responsible if something goes wrong with well, and Attorney VanEck said the City of Belding would be responsible.

Manager Niemela talked about the well and we have to make sure everything is okay.  He talked about the 200 foot circle around it. None of the buildings are affected in that. We will have control of that with nothing being done without our knowledge. We will want to protect ourselves if something does go wrong.  Within that two week timeline we will have information for our protection.   Under current law, the Council has the veto. Under RAD, it transfers land to the Belding Housing Commission. The City’s ability for veto can’t be done once the RAD Program begins.  He asked how to generate money and Ms. Carlson said contract rents.  Contract rents are set right now. After Oct. 1, it may get bumped up.  Manager Niemela said the City has to transfer property ownership to the Commission or they can’t get RAD.

Councilman Miller asked will we still get in lieu of taxes. Ms. Carlson said yes. Under RAD they would still be a housing commission. They might need to come back to the City regarding rents/repairs/etc.  Councilman Miller asked if there is the ability to get non-profit, and Ms. Carlson talked about it being in place if needed down the road. Councilman Miller looked up some of the pitfalls of RAD and one was communication. This is a bigger issue, and not sure the document they have would be easily understood by residents.  Attorney VanEck then talked about the misinformation and misunderstanding by residents.  Ms. Carlson talked about concerns by residents were mostly regarding rent costs and maintaining their residence.

Councilman Meyers said we want to have everything in place, but right now it is up to the City to fix that well, because we have control.   Attorney VanEck talked about the City and the well.

Councilman Feehan asked if the deadline is September and Ms. Carlson said yes. All they need is approval from the City. We need to know from DEQ what information is needed.  Mayor Gunderson asked if considered currently a public entity, how do you become a non-profit? A Board Member said that HUD allowed it so they could set up non-profit.  Ms. Carlson introduced four of her Board Members present.  Ms. Carlson feels it’s because of their dedication that they have been successful.

Public Comments

None

City Manager Comments

Manager Niemela gave an update on the Front Street garage and that they are getting close to being done. It is now insulated. They are waiting for the final connections of electric to heating systems. They need to get the overhead door in. They are also waiting for the painting contractor to come in because chunks of paint are coming off.  They didn’t clean it properly before painting.  

They are dealing with a bit of traffic issues. The good thing is because of weather, there is lots of activity at Water St. Park.  It has easy access to the river. Unfortunately, parking wasn’t good and tickets were issued. We are working on that so people can continue to use that.  The lot is not big enough to accommodate a lot of traffic.

Council Comments

Council Member Scheid thanked Ms. Carlson for a well put together report. He complimented her and her Board.

Council Member Miller echoed the same thing.

Council Member Meyers also echoed that.

Mayor Gunderson said there are openings on different Boards; the Library Board can be a resident or non-resident. Petitions can be pulled from City Hall for the three open seats that will be vacant in November, and they need to be in by August 7 by 5pm.  He thanked everyone for coming tonight.  He said great job to Ms. Carlson, her Board and Attorney VanEck.

Closed Session – to hold a strategy and negotiation session connected with the negotiation of a collective bargaining agreement if either negotiating party requests a closed hearing.

Council Member Scheid made a motion to enter closed session at 8:34 p.m., supported by Council Member Miller.

The question on the motion was called and the result of the voting is as follows:

            Ayes:   Council Members Miller, Meyers, Scheid, Feehan and Gunderson

            Nays:   None

Council Member Scheid made a motion to return to open session at 9:30p.m., supported by Council Member Miller.

The question on the motion was called and the result of the voting is as follows:

            Ayes:   Council Members Miller, Meyers, Scheid, Feehan, and Gunderson

            Nays:   None

Adjournment

Council Member Scheid moved to adjourn the meeting, supported by Council Member Feehan.

The question on the motion was called and the result of the voting is as follows:

            Ayes:   Council Members Miller, Meyers, Scheid, Feehan and Gunderson

            Nays:   None

The Mayor adjourned the meeting at 9:31 p.m.