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    8.    
City Council Regular
Meeting Date: 04/03/2018  
Subject:    Consider Amendment to Memorandum of Understanding with Anoka County HRA, Community Development Block Grant Program
Submitted For: Grant Fernelius From: Matt Brown, Economic Development Coordinator

INTRODUCTION
The Council is asked to consider an amendment to a Memorandum of Understanding (MOU) with the Anoka County Housing and Redevelopment Authority related to the City's Community Development Block Grant (CDBG) Program.
DISCUSSION
At its February 20 work session, the Council discussed options for its FY-2017 and FY-2018 CDBG entitlement funding. The CDBG program is administered by the U.S. Department of Housing and Urban Development (HUD) on an annual entitlement basis for eligible counties and cities. Funds are awarded by HUD using a formula that takes into account the age of housing stock, poverty rate and other factors. For many years, Anoka County was the primary recipient of CDBG funds and distributed them throughout the county on a competitive process. In 2001, the City of Coon Rapids elected to receive an entitlement allocation of the County’s CDBG funds. This option is only available to communities with a population of 50,000 or greater and currently Blaine is the only other Anoka County city that meets this threshold. However, because Blaine has remained in the county-wide pool, Coon Rapids is the only community that receives its entitlement allocation.

In general, CDBG funds must be used for community renewal and lower income housing assistance activities. While other projects have been funded over the years, Coon Rapids has largely used its allocation is used for housing rehabilitation. For many years, the City’s housing rehab program was administered by the Greater Metropolitan Housing Corporation's (GMHC) Housing Resource Center. The Housing Resource Center ceased operations in 2017, leaving the City without an administrator for the housing rehab program. The decision ultimately affected the City’s FY-2016 and FY-2017 CDBG funds, as the City has been unable to identify another agency willing to administer a single-family rehab program as small as Coon Rapids' program. As a result, the City chose to reallocate the remaining FY-2016 funds on rehab of the Pine Point Apartments on Hanson Boulevard.

FY-2017 CDBG Funds. The City needs to spend its FY-2017 CDBG funds by the end of this year or risk re-capture. As discussed above, there is no practical way to spend the funds by the end of the year on a single-family housing rehab program, since the program does not have an administrator. As discussed at the Council's February 20 work session, Staff proposes that the balance of the FY-2017 funds are used for rehab of Common Bond's Galway Place townhomes on Hanson Boulevard. Anoka County would provide administration for this project. The MOU amendment formalizes this arrangement.

FY-2018 CDBG Funds. Because it is no longer feasible for the City to administer its own single-family rehab program using CDBG funds, Staff proposes that FY-2018 funds are turned back to the County. Coon Rapids residents meeting the income requirements would be eligible to apply for loans through the County's single-family rehab program. In addition, the City could apply each year for regular CDBG project funding as new projects, such as multi-family or community facitities, emerge. In some cases, Coon Rapids projects could receive more funding than its entitlement amount depending on the funding awards.
RECOMMENDATION
Staff recommends that the Council approve Amendment No. 3 to the Memorandum of Understanding with the Anoka County Housing and Redevelopment Authority related to CDBG program administration through September 30, 2019.

Attachments
MOU-CDBG

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