Roll call, please.

Um Bowie here.

Coleman, here.

To us?

Here.

Kim.

Yay?

Here.

Chair Johnson?

Here.

There are six present.

That one one absent, then being Commissioner Camp.

Item number one is RES twenty-six-1173.

Approving and authorizing the C D B G loan amendment for TWV limited partnership district three and five, wards two and five.

All right.

So we did receive a staff report on this at the last HRA meeting, and I just uh these next couple items will move a little bit quicker in nature only because we want to leave time for um some of the other items that we're starting a little bit late.

Um but sometimes and uh conversations are a little bit more important and bleed over.

So with this item itself, we did receive a staff report on this item last time.

Are there any questions related to it before we take a motion?

Uh Director McMahon, is there anything you want to add?

Nope, just a reminder that the action before you today is approving the amendment to the existing um C D BG loan agreement and then authorizing execution of loan documents as necessary.

Uh I'll take a motion from uh Commissioner uh Naker to approve all those in favor.

I all opposed six in favor, zero opposed, resolution as adopted.

Item number two, RES twenty-six-1174 resolution amending the business business assistance fund BAF guidelines citywide.

And to contradict my last statement, this one we did not receive a staff report on last time as it's a new budget item, it's a new item in front of us, but I do see assistant mayor Sumerlinger coming up, and I know the council president has also been involved.

So um welcome, Assistant Mayor Sumalinker.

Thank you, Chair Johnson.

Commissioners, um, so the item before you um adds three words to the downtown vitality fund's economic development pool um within the public realm improvement um aspect for eligible uses, it adds the three words skyway access improvements.

Um I'd defer to council president or commissioner uh naked to talk a little bit about this, but I'll just note that the philosophy behind public realm improvements as an eligible use does contribute directly to the vibrancy of downtown and that interoperability between buildings and streetscapes and vice versa.

So the other items under public realm improvements are lighting, outdoor seating, and public art, and Skyway access does help kind of get that street level to all different of our wonderful buildings connected to the Skyway.

Thank you, and thank you for being here making the time.

Commissioner Neaker, yeah.

Thanks.

Uh Madam Chair, thanks so much, Assistant Mayor, for your hard work on this as well.

This is something the Assistant Mayor and I have been working really closely on.

We've been hearing um consistently and vociferously from downtown constituents that restoring Skyway access throughout the system is critical.

Um it is an amenity that people move downtown for.

It is essential for those who have mobility challenges in the heat that we were just experiencing last yesterday, two days ago, um, and that we'll come back, and the cold that we experienced in the winter that it's hard to remember right now.

Um the skyways are absolutely essential.

So uh we've had the central portion of our skyways through um Central Station, the Athletic Club and the Alliance Bank building cut off for too long.

Um and it's become clear that we need to restore that access.

That does come with funding challenges in part due to the need to secure some of the businesses that are adjacent to the Skyway, especially in the Alliance Bank building, the need for additional cameras and other physical changes.

So uh the downtown vitality fund, as the assistant mayor mentioned, is the perfect source for this because downtown vitality absolutely relies on having a, as the assistant mayor says, double decker approach, including the Skyways.

Um so we think this is completely aligned with the goals of the fund.

It's just unfortunate that we left out these three little words uh skyway access improvements when we first uh created the fund.

So with this change, we will be freeing up the capacity for those who are interested in making Skyway access changes to apply and receive that funding and for us to restore Skyway access uh in the near term.

And just for clarity for folks who are getting caught up to speed, our business assistance fund uh guidelines encompass the downtown vitality fund.

So that's the only reason why it doesn't say changing the downtown vitality fund guidelines.

Um I'll just share that having reviewed it and also been in some of the conversations.

I also um supportive of adding Skyway access improvements to downtown vitality.

I think it is a major part of it.

I know that um, you know, just being able to walk through the skyways has been something that a lot of folks are waiting on, including myself.

So appreciate the guideline pieces.

Um are there any questions for either our assistant mayor uh Sumerlinger or Commissioner Neaker?

Uh Commissioner Bowie.

Thank you, our Chair Johnson.

Um not well, a question, but uh first I want to just make a comment.

I think this is really thoughtful.

I also support it.

I know when I saw it, I was like, wow, this is this is good.

Um I'm happy to see this use of funds to help strengthen and improve our our skyways and uh you know, as someone who worked downtown and um also enjoy coming downtown.

I'm excited to start utilizing our skyways more um and just getting back to you know all the things that I used to love about our St.

Paul downtown.

Um I have a quick question, and um, you know, it's it's uh not a candid question, but particularly just for clarity.

Um I know this says in the improving Skyway system, uh, but I just want to just make sure not to be confused with like expanding skyway system.

I know that's probably a much larger conversation, but um I'm just curious to know if we ever explored um the potential of either these funds or even a process if if a business or a property owner would like to expand connectivity through our Skyway system.

Commissioner.

So um I think uh great question, Ms.

Bullying.

Thank you for your support.

Um while I think technically this language could encompass adding to our Skyway system, um it would uh that would likely be at the cost of far beyond what our entire downtown vitality fund could afford, and also would require action by the Skyway Governance Advisory Committee and the City Council to add to the Skyway system.

So um some this is part of our downtown vitality fund.

Anyone can apply to that fund, but I think that an application to actually add to the Skyway system would run into a lot more regulatory barriers and it wouldn't be something we would prioritize.

And just a quick little follow-up because I just you learned something new every day as a commissioner and a council member.

Um can you talk a little bit more about the Skyway Governing Committee?

That's the first time I heard about it.

Thanks, Ms.

Bowie.

Yes, it's a committee of the Capitol River Council, and it's responsible for making recommendations to improve change policy changes in the Skyways um code of conduct and the Skyways signage.

Um they meet monthly, I think Fridays at 9 a.m.

if I recall, if it's still happening then.

Um so and it's in our code, it's the body that actually regulates uh Skyways in the city.

Thank you.

I also learned something every day.

Um I don't see any other questions from any commissioners, so I'll take a motion from Commissioner Naker to approve.

All those in favor.

Aye, aye.

All opposed.

Seven in favor, zero opposed.

The resolution is adopted.

Thank you, Assistant Mayor, for being here.

And appreciate all the work for staff that have been working in the back end to figure this thing out.

What seems like a very quick action took a lot of effort to do so.

So I know this has been a long time in running, so special shout out to our city attorney, Sam as well for I'm sure the diligent work that the city attorney's team was doing on even making that uh that those few phases work and the guideline changes, because we all know.

You never get to see the all the work that happens behind the scenes.

So item number three, RES 26-1175 resolution authorizing a three-year license agreement with Union Pacific Railroad for its exclusive use of HRA property at 43 East Water Street, District 3 Ward 2.

Marik, and if you all recall, this is the license agreement that we had between HRA land and the Union Pacific Railroad that will be used for three years, potentially later on, talked about as potential opportunities for our future city department.

So right now we're just making use of the space in a better way, so and hopefully getting some revenue from it.

Um seeing uh no further questions, just checking.

All right, take a motion from Commissioner Yank to approve.

All those in favor.

Aye, aye.

All opposed.

Seven in favor, zero opposed.

The resolution is adopted.

Item number four, SR26-143.

Introduction to redevelopment project at 47 Douglas Street, District 9, Ward 2.

All right, so now we're into the staff report pieces of the agenda.

This is an item that we have not had a step report on yet, so um I'll be uh looking forward to seeing it and hearing about this project.

So, Director McMahon, if you want to go ahead and introduce the staff that will be presenting.

Yes, Chair Commissioners, thank you.

We have Joe Moussaff here to present information on this redevelopment project at 47 Douglas Street.

This is one, as you indicated, that the information will be presented today.

Opportunity for questions, and the action would be before you for consideration at your next HRA meeting.

Thank you, Director, and welcome Mr.

Moosef.

Uh thank you, Chair Johnson and Commissioners.

My name is Joe Musaff.

I'm um an employee of the Department of Planning and Economic Development, and I'm here to introduce you to a matter that will be uh before you for approval, hopefully at your next meeting on August 5th.

This is regarding the proposed rehabilitation of an HRA-owned vacant single-family house at 47 Douglas Street, also known as the Galvin Sheeran House.

Uh 47 Douglas Street is located in the Little Bohemian neighborhood.

It is part of the West 7th Fort Road Federation District Planning Council 9 and is in Council Ward 2.

This home was built in 1883 at the corner of Harrison and Douglas and moved to its present location in 1912.

Um very quick background.

Um the house was donated to the HRA by Wells Fargo Bank in 2010.

From about 2010 to 2015, right in that range there, within um really like a two-block radius of the location of 47 Douglas.

There were eight HRA-owned homes that were rehabbed.

Um there was one new construction single family home built on a vacant HRA owned lot.

And two homes were moved on to new locations and rehabbed.

So this is in the middle of um a very concentrated large effort that has been undertaken over a number of years of neighborhood uh stabilization and revitalization in this uh spot here.

Um there were a few different partners uh in all of that work, but the West Seventh Fort Road Federation played the most significant role as developer of most of these homes, and the Federation was reluctant to take on 47 Douglas.

It didn't um really fit with um with their market with their marketing goals, and so we offered it as an inspiring communities uh property through an RFP in 2014.

And unfortunately, we received no interest at that time.

So again, we offered it in 2015 through another RFP, and we did identify a developer at that point, but the developer couldn't follow through with the project.

At that point, we suggested demolition of the property.

Um, but uh many neighbors, including some that are in the audience here today, uh, rallied in support of saving the property and actually um found us another interested developer.

Once again, that deal didn't hold up, and now we get to 2020, and uh a local nonprofit Historic St.

Paul submitted a proposal to us.

The original floor plan resulting in a two-bedroom, one-bathroom home.

Historic St.

Paul will rehabilitate the home in a manner consistent with the Secretary of the Interior Standards for Rehabilitation, as if it were listed on the National Register of Historic Places.

Quick note about Historic St.

Paul.

They are a St.

Paul-based nonprofit with a mission to preserve and promote the cultural heritage, character, and vitality of St.

Paul neighborhoods.

And to that end, Historic St.

Paul periodically takes on real estate development projects like this.

A recent similar example is their rehabilitation of the John and Ann Lewis House nearby at 412 Goodrich.

And there are a couple representatives from Historic St.

Paul with us here in the chambers today.

This is a uh image of the 40 of the Douglas Street facade, and you can see it's missing the original porch and the original lap siding has been covered.

And this is a excerpt from the proposed rehabilitation plans showing the covered porch that Historic St.

Paul intends to add on to the front of the house, and a reestablishment of the primary entrance will be on the Douglas Street side.

Just two other quick images.

This is the north elevation proposed showing the uh porch extending to the Douglas Street side.

Um then this is um admittedly a tough uh graphic to see, but I uh I just wanted to give you an idea of the floor plan.

Again, this will result in a two-bedroom, one-bathroom home, uh a small home, approximately a thousand square feet.

In 2021 and 2022, the HRA Board of Commissioners approved the sale of the property to Historic St.

Paul and approved investment of 225,000 to subsidize the rehabilitation.

Since that time, the project has been delayed due to Historic St.

Paul's loss of commitments from two different general contractors.

The organization also transitioned through a leadership change, and this delay has resulted in increased construction costs.

But Historic St.

Paul has offset much of the increase with securing additional commitments from Minnesota Housing Finance Agency's Impact Fund.

Historic St.

Paul is requesting an additional $9,009 of development subsidy, bringing the total development subsidy ask of the housing and redevelopment authority to 254961.

On the left hand column, current ask, here's the proposed development budget.

Total development cost will be $594,000 with an anticipated sale price of $235,000.

Minnesota Housing Finance Agency has committed 105,000 to the project, and the HRA has requested to contribute 254,961.

PED's resource team has identified community development block grant as the best source of funds for this project.

This will be provided to the developer per the inspiring communities program design as a forgivable loan.

In addition, also consistent with the inspiring communities program design, the future buyer will be eligible to receive up to $5,000 in down payment assistance.

HRA's investment in this project will exceed $250,000.

Therefore, City Council procedure of project labor agreements is applicable.

Our standard process was followed, and staff recommends non-use of project labor agreement.

This will require a city council action, and that will be brought to City Council in conjunction with uh HRA's action two weeks from now.

And then my last slide.

Just a summary again that in two weeks we'll have an action before you to consider requesting that you reconfirm the authorization to enter into development agreement with Historic St.

Paul.

Authorized gross development gap contribution in the amount to 254,961 dollars.

And then because this is CDBG, there's an administrative action that needs to happen correspondingly with the City Council through something called an administrative order.

And the City Council must ratify the recommendation for non-use of PLA.

That's the end of my presentation.

I'm happy to take any questions.

Commissioner Acker.

Thanks, Madam Chair.

Mr.

Musaff, thanks so much for the presentation and for all your hard work on this.

I am so excited to see this coming in front of us for action.

I think you and I toured this home 10 some years ago.

And it has been clear since then that there is that the neighborhood deserves reinvestment in this property and that it needs to be preserved.

So I'm really grateful that we're in this place.

I want to thank the neighbors who are here today who have advocated for this home over many, many years.

And huge thanks to Historic St.

Paul for sticking with it and sticking with us.

Just two questions.

One, uh so if you can't tell, I'm in uh serious support of this, but two questions.

One, just can you remind us?

Um I think I think we had confirmed that with this additional $29,000 some thousand dollars, this will be the last investment, and that Historic St.

Paul is then ready to commence construction.

And I just want to clarify that this is it, and we are at the finish line and there will not be further delays.

Um then also can you remind us who an eligible buyer would be?

What are the eligibility criteria?

Uh thanks, Chair Johnson and Commissioner Naker, especially for that second question.

I um should have mentioned that in my presentation.

Let me address that first.

Um Historic St.

Paul will be required to sell this home for owner occupancy to a household whose income does not exceed 80% of the area median income.

Um to your question regarding is this ready to go, the answer is yes, and they can break ground.

Break ground is not the right term for a rehab, excuse me.

They can commence the rehabilitation this fall.

Thank you.

Commissioner Coleman.

Thank you, Chair.

Um, very supportive.

I have a quick question.

I just haven't seen, I don't think since I've been a member of this body, the non-use of PLA recommendations.

I'm wondering if you could say a little bit more about how we got there and why that recommendation.

Uh Chair Johnson and Commissioner Coleman, um the city's PLA policy is that if investment is exceeds $250,000, there is a protocol that we shall follow which uh requires notification of interested parties that this project is uh likely going to commence and whether there is a recommendation from any interested parties that a project labor agreement should be considered or not.

We receive no response, and therefore our our um recommendation is no project labor agreement.

Go ahead, Commissioner Coleman.

Just a quick follow-up.

Those interested parties are building trades, unions, all of the above.

Anyone else?

That's right.

Um it uh the notification list uh we can share with you, um, but it's the building trades.

Yep.

No need to share.

That's all I want to show.

Thank you.

Um and then Mr.

Masself, can you talk a little bit about the HRA funded down payment assistance as comparison to the city down payment assistance program?

I I I apologize, but could you say that one more time?

Yeah, the HRA will provide up to $5,000 in down payment assistance to the buyer.

Can you just either differentiate or is that beyond the is that within the city's down payment assistance?

Is that it says it's HRA funds, so just trying to figure out.

I think that might be the first time I've seen that in a while.

Just I understand Chair Johnson, and thanks for repeating the question.

Um the um the five thousand dollars of down payment assistance, um well, it is um certainly uh useful from um a marketing standpoint to um to move the property once it is for sale.

Uh our primary motive is to use that um down payment assistance as a way to enforce owner occupancy and thus the initial affordability period for five years.

So those dollars are structured as a forgivable loan for given over those five years, but uh a portion would be due back if the owner um sells the home or fails to occupy it in owner occupancy for those five years.

The source of those dollars is from our small scale development inspiring communities program.

Okay, and I guess I'm more so wondering why that wouldn't be from the down payment assistance program.

Uh Chair Johnson, the um it wouldn't well it wouldn't be.

These are uh because this is a um this is specifically tied to an inspiring communities outcome.

Um so it's a it's a piece of the inspiring communities uh program design that there's an associated down payment assistance connected in part to um helping us enforce some period of owner occupancy and affordability and it's funded through um the inspiring communities budget.

Okay, all right, thank you.

Are there any other questions for Mr.

Musa?

Uh I know that you said the history that Historic St.

Paul is here, members from the organization.

There was a question just around this being it and if whether or not they'd be able to go forward with the development.

So I'd take this time to just welcome up someone um from Historic St.

Paul to just share if you would be able to move forward if you receive the subsidy and just like what your timeline is currently for the project.

If you wanted to come and talk to that, this would be I'm willing to let you come in for a few minutes before we transition to the budget to actual presentation.

Hi, I'm uh Carol Carey, and I live at 635 Bates Avenue.

Um I'm working with Historic St.

Paul on the completion of this project that was started a number of years ago.

Um, after a lot of stops and starts, um, we were very happy to hear from Joe over the summer that it looked like we were pointing on all in the same direction.

And so over the past couple of weeks, I've taken the time to meet with our construction lender and been in communication with our general contractor to make sure every everything was in place to move forward.

Wonderful, Miss Carey.

Thank you so much for being here, and thank you to uh members that are here from Historic St.

Paul too and your investment in the city.

And as long as I up here, I I really want to reiterate that we wouldn't be here today if it wasn't for the extraordinary effort of Joe and also the um inspiration and advocacy of the local community.

They've uh they've kept us engaged.

So well, thank you so much.

Yeah.

All right, so this item will be in front of us on August 5th.

Thank you so much, Mr.

Musa, for being here.

Okay, thank you, Commissioners.

Item number five, SR26-144, second quarter budget to actual report.

It's that time again where we have our budget to actuals for quarter two, so I'll welcome up uh Deputy Director Green.

Good afternoon, Chair Johnson, Commissioners.

It is great to be here today.

My name is Nicole Green.

I am the Chief Financial Officer.

Thank you.

And uh Deputy Director for the Department of Planning and Economic Development.

I am here today um as part of the action that was taken uh last year in December to um ensure that we were providing um quarterly quarterly budget to actual reports um to this body.

So thank you.

Um I appreciate the opportunity and let's get started.

Um first I want to just uh recognize and extend my sincere pre appreciation to the PED accounting staff.

Um first I want to just uh recognize and extend my sincere pre appreciation to the PED accounting staff, um, OFS leadership, uh especially the coordination and cross-functional support that we've had from CFO CFO Director Joe Harney, um Council Budget Officer Verma, thank you, and our newly installed, permanently installed ED for the department, Melanie McMahon.

Thank you all.

It is that cross-functional coordination that is super super important.

Our job uh on the finance side is to provide accurate and objective decision support information in a timely uh in a timely fashion.

We rely on the understanding of leadership, our understanding of leadership's capacity, uh perspective, and approach to guide the development and presentation of that information.

Um so we constantly see cross-functional confirmation, uh alignment and consistent consensus across uh our leadership body.

We have been in transition and interim stages for quite some time.

Uh and for Director Verma and uh Director Harney and myself, uh the engagement, uh, especially in the second quarter, uh kicking off uh what we know is going to be uh a long-term commitment to improving our current processes and answering a lot of the questions, addressing a lot of the concerns that you have.

So I'm super super excited as well as appreciative for them.

Um and then also just wanted to say include having completed our initially initial quarterly update in April, we are continuing to learn and improve this reporting process.

It's exciting for our staff, um our division leaders, Jules, Jimmy, Yasmin, um, and uh all of our program staff to be engaged in the process to have their assignments and to challenge uh what we know and how we how we manage our finances.

So I I appreciate their commitment as well.

And as a reminder, the financial information we'll review today and all of the information that you all receive throughout the quarter and included in this presentation is preliminary, estimated, and unaudited.

So thank you for your patience as we continue to work through that as well.

Um you see here our uh new staff that have been added within the accounting department.

I just want to also recognize them, Samantha Parsons, um, an accountant accounting three, accountant three, and our accounting tech chancellt law, who is specifically um joined our team uh in relation to our ERA emergency rental assistance work.

We're excited for them, and uh also want to bring attention to the fact that in Q2 we've made significant progress on updating our uh Northridge loan soft loan servicing software system and also uh moving through the parking operator RFP.

Um I won't go through the priorities, but I just want to um make sure that I extend our deep appreciation for the strategic memos received and obviously in the um mayor's budget address.

Um, that information informs our staff and partners of the interest and objectives objectives of the administration and council.

Um these priorities have um deeply driven the conversation, the program planning and the budget development that we've had over uh throughout 2026.

So specific to budget development, um we are continuing to increase awareness and engagement from our staff and division leaders and including these objectives and those instructions and our instructions for their work on the spend plans and work plans that you all receive.

So thank you.

Thank you for documenting taking the time and making sure that everybody's clear and aligned.

Um then just a little uh bit of background uh here.

Uh and I I don't think we talked we talked about this in the first quarter, but just want to continue to emphasize that uh PED is most significantly funded through our special funds.

Um we have about our total budget at about four 4.6% of the city's overall budget, but our general fund um uh receipts, our general fund um portion is uh less than um half a million dollars.

So uh just want to let you all know that and continue to uh reiterate that our access to the special funds uh deeply supports the work that we do, and also the uh other funds like Laha, City General Fund, uh STAR and HUD grants really uh supports the work that we do as well, and those are the the best options for the work that we do and align with the the work of the HRA.

This report, I think this slide probably needed some more updating, so I apologize for that.

But I want to I want to kick it off since April, what we've done in terms of you know providing the first initial quarter quarterly budget to actual report.

We've established consistent coordinating meetings between PED, OFS, and Council, Council HRA budget directors, and also we are exploring and considering various options and opportunities available to ensure administrative and council objectives and priorities are met.

From an accounting perspective, this is really important because in addition to the objectives that you all have documented, as we review those objectives, what is important for us from the finance side to think about what we've already began discussions on, our improving improvement of our financial reporting timelines, two alignment of financial reporting systems to consistently provide up-to-date and up-to-minute, up to the minute decision support reporting for various stakeholders, including you all and the administration.

So those conversations are really starting to pick up.

And that's the question that I know that you all have been asking since I arrived in the fall of 2024.

And so I'm I'm excited about the progress that we've made just in the last three months to that end and those very specific three three perspectives that we're we're talking about.

While we are all deeply immersed in learning about our existing operations, uh for Joe and Kamud and I specifically, uh we're new, and so we also are doing that while we're managing the day-to-day requests that are coming from uh you all in the administration and public actions changes news items as well that we have to contend with.

So we're committed to making uh time to advance and improve industry best practice in this work that we're doing.

Um this item is a repeat from the first quarter, and I just in I just want to uh clarify or provide a little bit more context here.

Um in Q1, um we had the mayor's address and memos from the council supportive of the coordination uh of the work that we did.

And so formatting of the reporting that you all receive uh through Q1 continues to prove helpful.

Um and in our second installment, we're we're learning more and hearing more feedback from you, and so please continue to to provide that feedback so that we can update update the reports that you receive and improve the information.

Um in Q2, as I just talked about, um the work of the coordinated priorities, um we're that is becoming more clear, um, and we're getting more in-depth exploring that work as well.

And uh in Q3, we're working with OFS to learn about our systems and processes, and that information happens on a daily weekly basis.

We're challenging ourselves and our staff to be clear and how confident we are and and can and should be and what we've always done and what we're currently doing, where we're not confident in what we've always done and what we're currently doing.

We have to we have to have the courage and commitment to resolve and establish uh those realistic timelines in order to move forward.

So that's the the operational work to make sure that the budget to actual reporting is smooth, timely, and accurate.

So now the actual the actual budget to actual information.

Um so we always start with our major programs because that is what you ask uh asked us for, more information on the programs.

Um and so what is not included in this report is PED operations, which is about 15 million dollars annually, and that is you know deeply funded by the HRA levy.

It's not included on this program perspective.

Um, so I just want to make sure that we we are all aware of of that cost as well.

But um in our major programs, um, what we have been able to do in working with our division leaders and our program leaders is to um continue to look at and assess the actual activity, some of which Joe just mentioned, 47 Douglas, and to plot that out, plan that out in the time that we're going to need it.

So I want to call your attention to the uh first column here because it includes not only the budget allocated in 2026, but what we wanted to do was to make sure that you all had access and understood the prior year, the previous year's funding that was available.

Sometimes it's a um we have to ask for it to carry forward, and sometimes it's a natural carry forward depending on the source of that funding.

Um, and so what has been difficult for us in these conversations with you all over the years is the access or the need to spin down the prior year funding, and in doing so, and our teams working hard engaging that work.

And in doing so, and our teams working hard engaging that work, it has appeared at times for this body that the current um budget allocations are not moving, that we're not spending any money.

And we want to be clear that we are, but that we are especially where there is a time constraint, where there's an expiration of funding, we want to make sure that we are responsible to that first.

So the amended budget column in this uh in this presentation likely includes, especially for um uh some of the larger items like down payment assistance, um emergency rental assistance, and uh commercial corridors, um, and inspiring communities, maybe not commercial corridors, um, but inspiring communities definitely includes that prior year funding, and folks have a plan, and uh you've received that information, so I encourage you to look at that because that is attached to specific properties, it is attached to detailed work, um, and our our team has been um really good and making sure that we get that information to you.

And Deputy Director Green, I just wanted to um share a couple of things as I was going through this.

Um Director McMahon, can you speak to the $20,000 overage in full stack and what how that's being projected higher?

That was like the only one that was projected over budget.

Uh Chair Commissioners, my understanding from last year is that was carry over.

No, the allotted time for a full stack was 350,000, and it looks like their projected allocation is 370,000.

I actually turned to Deputy Director Green on that one then.

Um that item I think we probably adjusted it.

Um again, we rely on the information from the program director.

So I believe in this case, um, what we learned is there is um interest or uh activity that could spend 370, and we again this is an iterative process for our staff.

So uh what we do is go back and and inform folks, hey, here's your sourcing, you have to stick to the sourcing.

So while they may still be planning, right?

Um, and that our programs are oversubscribed, right?

Folks want more of what we're doing.

Um, while they may still be planning that, then this process allows us to have that conversation with them and to manage that to what it is.

So it's a good example of where you know our leaders have said, hey, if you gave me, I I could spend this amount, and this report helps us to say, yep, that's great.

Um we note it.

Um and on the annual spend plan that they work from, they tell us uh, hey, this is a risk, right?

The program spending what I could plan is more than what's available.

And then we take that into account for the next year's budget um budget review.

Okay.

I think that is just really helpful when we're going through the line items.

I have a couple of questions that maybe just didn't match my current understanding.

I think part of it was the my understanding was the downtown vitality fund allocation was around five million, not 5.9.

Um, and I think just like it would be helpful to understand that piece a little bit better too.

But I think when it relates to any item, I'll just talk broadly, especially HRA items.

Um, I don't expect to see an individual individual program using HRA funds just go over budget without having some sort of board action.

So if that was the case in that matter, um, you know, we had a full stack presentation in particular around that, um, where the presentation that was presented was $350,000, and that was an increase from prior years, and there was a little bit of ambiguity around like what could be spent at that time if I recall correctly.

And I just don't want to make a habit of going over budget from what's given.

And if that was the case where that was necessary, I would fully expect it to come to the board for approval prior to that happening, not on the back end.

So just want to be very clear about that because that was something that caught me off guard a little, and also just in general, I just want to be clear what in any project that it relates to regarding HRA funding.

If that was the case or those were the numbers that we were gonna see part of doing this process, is making sure that if we are gonna go over that, that would be something an item that I would fully expect to be brought to us for approval prior to doing so.

Correct.

Correct.

And as we improve the reporting, you'll I I don't think that you all have access to that now in the reporting that we provide, but there is a risk mitigation section where we're looking at this program is we have more need than we have funding.

And so we're working um with our program leaders and division directors to really be clear and open.

Um so we want them to tell us we need more funding.

We want them to inform uh so that we can provide you that information that hey, here's here's the information that we know from folks.

So we'll continue to work on that.

Thank you.

I saw quite a few different hands, so I'm gonna try to remember the order.

Um and uh Commissioner Bowie, I think I saw your hand first, Commissioner Aiker and then Commissioner Yang.

Thank you, Chair Johnson.

I'll be quick here.

Um Deputy Director Green.

Please forgive me just in case you opened up with talking about the time frame for the what what is particularly the quarter to.

Um because I'm just looking here at the program for the CDBG acquisition fund um and just really just thinking about the time we utilize this fund, particularly in my award for the Saxon Ford.

Um, if you can, you know, it is this the source um of that fund or is that a different one if we have actuals for that?

Because I recall that was six hundred thousand dollars was the cost of that acquisition, um, which would have exceeded the amount that we have in here for 300,000.

So I'm just wondering if that's the exact source or if we are now if that acquisition was during quarter three.

Thank you, Commissioner Bowie Chair Johnson.

Um I don't know the details of that specific project, but I can tell you with the CDBG what you're seeing on this presentation, this report, CDBG that uh award year for those funds begins June 1st, I believe.

So it's off cycle from uh HRA budget um uh allocations.

And so what you're seeing is the allocation.

We receive that information usually late spring.

We're not actually able to you know report on it.

We give you an estimate in the first quarter, and then the second quarter, what you're seeing is what we know we have been awarded for these particular CDBG items.

Um and so I would I would I would I'm guessing, and Director McMahon can add additional information on Saxon Ford, that was probably funded by previous years allocations.

It's not this allocation.

Okay.

Thank you.

Yeah, that would be helpful just to know in terms of how we are tracking the source of those funds.

If it's not this year's award, um, I think it would be helpful as we're tracking, you know, and provide an oversight that it's previous years.

So thank you for that clarification.

Yep.

Ms.

uh director McMahon or uh Ms.

Lorenz, would you be able to provide any additional clarifications on whether that was last year funded or not?

I saw a couple head nods from the audience, so thought I'd ask.

Chair Commissioners, yes.

Okay.

It was last year funding.

So this year's 75,000 would be projected for what would be on a June on a uh We we had access to it June 1st, and so they're planning those projects now.

And I if I remember correctly, um those go through I the city CIB process, I believe.

So wonderful, thank you.

Uh we're gonna do Commissioner Naker, Commissioner Yang, and then we'll let you get through the second the couple slides on the revenue and then take any questions from those two.

Commissioner Naker.

Thanks, Madam Chair.

Um Deputy Director, could you speak a bit to some of the um areas where it looks like there's gonna be significant projected underspend?

Um looking at emergency rent assistance, familiar families pilot, which I thought we did something with, maybe I'm misremembering.

Uh the HRA investment tracking system.

Sort of ones where we expect to spend zero, I'm particularly interested in, and something like ERA, which we worked really hard to open up more dollars, and I thought was seriously oversubscribed, wondering if you can speak to those.

Thank you.

Uh Commissioner Naker, Chair Johnson.

Uh love to speak to those.

And I'll I'll start with the zero spend.

Um, those are transfers out to other departments, um, uh at least in the case of the familiar families, um, and the supportive housing.

So the supportive housing we expect to update in uh in Q3.

Uh we have been deep in conversations over the last three to four weeks and and trying to solidify that.

And so one of the approaches we've taken to this report is if we have it documented, right?

If what the plan is, if we have it documented, what we're doing, um, if we receive that that communication, official communication, then we want to put it on this report.

But otherwise, since we are not our staff are not involved in the actual execution of the budget spend, um, we simply temper that.

We don't know, and we don't want to insert ourselves into their work, if you will.

So that's why we're reporting zeros specifically on the uh supportive housing and the familiar families.

So we work with the administration to get that information, and when we get that information from them and and our other department partners or external partners, we will provide the update.

But that's what that signals.

It's not that the spending is not happening, it's that our staff are not deeply engaged in that spending.

And just as a quick note before you keep going, I I appreciate that, and I think it's really important for this to be meaningful for us to have that information somewhere.

We should be able to look at this and be able to tell with an asterisk or something else, just this is being spent, it's just being spent over here.

Um, even recognizing that your staff may not know that information, but to to call that from the staff who do.

Yep.

And the reason we call that out is because we don't have access in the system.

So we we really are trying to emphasize in the iterative uh instances of our quarterly to actual reporting the the um intense need that we have to have be able to pull this information from the system.

So this is kind of our effort to challenge right our systems and to continue to highlight what we don't have from our system.

So we appreciate your question, and that's exactly what we want is those questions that you we can go back and say, hey, we have to have this information, and we can't pull it from the system.

And so we want to be accurate in our reporting.

So thank you.

That's exactly what we're seeking here.

Um I would also say um there are two programs that there are an asterisk, and those are asterisks because those programs um are no longer operating.

Um again, though that funding has carried it's an it's an automatic carry forward, it's carried forward, but our we haven't been operating the programs for some years.

So I think in our budget presentation coming up uh in August, we will um uh ask for or um provide information that says, hey, we would like to officially close these programs so they're no longer showing on our budget.

And just to come back to the emergency rent assistance.

Mm-hmm.

Yes, sure.

Why are we predicting such an underspend there?

Great question.

Uh thank you, Chair uh Commissioner Naker, Chair Johnson.

That underspending, I just will remind the body that the program did not open the funding for 2025.

Uh I think there was a million dollars in funding in 2025.

Um that program did not open until December.

And so what we spent earlier in the year was we began spending uh uh on the prior years 2025 allocation.

So the full allocation of 1.8 uh is also showing here, and then the million dollars from the prior year.

And so because the program was just getting up and running, we haven't had the staff.

We've reported that uh over a few uh different opportunities in front of this body, they are catching up to be able to spend that amount.

So that's what we're looking at.

That's the why it's showing the lack of funding as they continue to staff up.

So we don't expect to be able to spend all of that down this year.

We expect to have 1.4 million.

And what we will do, I think what we have what we have explored um with this body, what we're exploring um uh with the administration is um in our 2027 budget proposal and our 2027 budget considerations.

Do we need to fund again at that same level while we have such uh significant amounts of prior year spending?

So that has been part of our budget operations, part of the conversations that uh uh Director Verma, Director Harney, and I have been having, uh, Director McMahon and I have been uh thinking about this since December of last year.

How do we right size our budgets so that we are able to spend the full allocation uh within the 12 month period that we've been given?

And are those conversations happening for downtown vitality fund as well?

Absolutely.

Absolutely.

Yeah, I think as we go through them, you know, too, and just some of the pieces.

I think the staffing is also something that I would note for emergency rental assistance, it's hasn't been actually um more than a personal uh like I think a full-time person in the last couple of months.

So I would note that there as well.

Commissioner, did you still have a question?

Thanks, Chair Johnson.

I appreciate the budget to action reports.

I know that in the past few years, one of the concerns brought up was about healthy homes, power of homes.

We're really interested in getting those dollars out the door, so it's great to see that um those dollars have almost been fully spent.

I was wondering about the district, the line item for district councils, because it also looks like it's close to being completely exhausted.

How we changed our system in so and weight for district councils.

I I thought at a one at one point I heard from some of them that it's a reimbursement basis, and so they would like to see that changed.

Are we maybe giving the dollars up front now where we're being more flexible with the two?

Uh, I believe it's still a reimbursement basis.

I couldn't speak directly to that.

But what we are doing is representing to you here, the contracts have been executed, and in prior years we have really struggled because of the compliance requirements, the deep compliance requirements to even get the contracts executed.

So uh I received a report within the last couple of weeks that all but four, I think, contracts um have been uh completed.

And so that um is significant, and again, that's the work of the reporting and and the the questions and the engagement that we have with programs that um we began those conversations earlier early in the year, began planning uh right away in December after the budget was approved last year.

So we were able to get those contracts in place.

But I'm really excited about that.

I'm really that's a great accomplishment to be able to have our contracts going.

So they're spending, right?

They can't spend until the contract is in place.

And that's this is basic math and telling me.

So they're able to spend uh earlier.

Um and then what you see here is uh based on uh our engagement with the district councils uh and what we understand, it's what they expect to spend throughout the rest of the year.

Um so that's what you're seeing is the projected actual.

So they're saying yes, we will get through this amount.

Um the board detailed reports that you received, show you uh what what is planned in the third and fourth quarter, and also in the first quarter of 2027 in closing out those contracts.

So having that information um for our accounting staff helps us to ask more questions and helps us to uh have the conversations uh strategically on our leadership team.

How can we help?

What can we do?

That's what you're seeing here.

Just a quick couple of can you explain a bit more about what all goes into those contracts?

Is that pay for the executive director money for them to do their programming work?

That's a great question.

And I know Melody's preparing a report right now.

Yeah, Chair Director.

Commissioner Yang, you're actually gonna be in early August receiving your presentation on district councils that provides not just a background but also the funding.

And in that presentation, we'll discuss in a little more detail about what a typical scope of work that the money that this money funds for each district council.

Thank you.

So but I'm happy to follow up before then as well.

Thank you.

I do want to make sure that we have a little bit of uh minutes.

Um so if you could just share the revenue and the special funds projected revenue piece of the presentation slides for us briefly here.

Absolutely.

So what I um what I really want to point out here is um the redu reduction uh in revenues, and so again, this reporting um process, this reporting request is really helpful to us in in planning and reviewing um what's available to us.

So uh again, we've had a a significant um reduction in uh support from general fund um and uh we everybody knows we've got a gap here, so uh that is what is represented in that number.

Um and some of the larger uh our ARPA funding has been significantly reduced, and on the loan repayments, we are working with um St.

Paul Minnesota Foundation and to uh restructure an existing loan with a uh with one of our external partners.

And so that's where you're seeing um some reductions in revenue here.

Um and the good news is we we are able to make the adjustments in those programs.

I'm gonna let her finish her slide here because just as a time check, we are at three.

So I'm happy to take an additional question afterwards.

We will go over.

Yep, go ahead.

Thank you, Tia Johnson.

And lastly, um on the projected revenues and expenses, what we want to show is for our special funds.

Um, our our planned expenditures um significantly outpace uh our current receipts, and we've been discussing that for years, right?

Our our special funds are diminishing and depleting balances.

And so we just want to continue to put that in front of this body.

We will continue to welcome any opportunity to talk a little bit more about those details and talk about what we can do to improve or increase receipts to the special funds, or um adjust spending in those special funds so that we are no longer depleting them.

But this is a this is nothing new.

This this presentation, this information is not yet.

Thank you.

And so I will um take a quick thing from Commissioner Naker and then I'll close this out.

Thanks, Madam Chair.

Just on the point about revenue on the previous slide.

Um I noticed that parking meter and fine revenue is predicted to be the same as was budgeted.

I just want to make sure the department is talking to the police department and the parking enforcement team.

The stats that I'm getting from our uh commander of parking and traffic enforcement because of our investment in an additional parking enforcement officer last year in our budget, is that they have now already in July matched the number of parking tickets that they gave out all of last year in downtown alone.

Um, and we're halfway through the year.

So I just I want to make sure that this is being informed by conversations with them because it seems like at least in some areas our investments are leading to additional revenue.

That's great.

Uh thank you for that information, Chair Naker.

I appreciate that.

We will um definitely reach out to them.

We don't typically um do budget amendments for increased revenues, but um uh we we just incorporate them into our our process and then try to anticipate what that increase would look like, whether or not it's ongoing or if it's a one-time increase.

Uh but uh Rhonda and I can continue to work on that and um get that information included.

And and not that an amendment would be necessary, but just in this document showing that projected would be higher if you think it will be.

Yep, we'll do.

Thank you.

Yeah, I think that'll be really helpful.

I feel like these last two slides are really imperative to the future of the HRA's special funds overall, as well as the revenue that we are having and exploring.

So that's really exciting about the parking enforcement officer investments actually coming to fruition.

I know that was one of the questions.

And so those numbers I think will be really helpful to just have them accurately reflected um in the future.

And also just in general for the budget cycle, and something to keep in mind.

When I talk about the special funds, and I also talk about the importance of doing things like minimizing our transfers outside of the special funds.

This is kind of where it's stemming from.

Um just to make sure that we understand this slide, Deputy Director Green, the projected expenditures that we have, um, projected actuals right now of expenses or about four 45 million, correct, in expenses.

But the revenue that we're receiving is a projected at about 37 million.

And even if it was what we actually budgeted every year, what we budget versus what we spend, even if you were to take the number and we received everything, my understanding we would still be over twelve twelve million dollars.

Is that correct?

In like what we would budget for expenses versus what you will most likely receive in the special funds.

So in this case, we'd be still running a deficit of almost twelve million.

Correct.

So I just put that into perspective as that's what's budgeted every year.

If we did this practice with the city budget, this is the quite the definition of what an imbalanced budget looks like.

Is that correct?

Correct.

So we are we are trying to be transparent and and open in our actual position, in our actual plan position.

Okay, thank you so much.

I appreciate that.

Thank you.

Thank you for your time.

I appreciate those pieces.

It's we love accounting.

We love the fact that you're here.

I think hiring a CFO for the planning economic development team and the and uh was one of the smartest decisions made by um you know some of our leaders today, especially, and I hope that most departments think about that.

So really appreciate the work that you guys do.

I know that it's an entire team behind it.

But that we are adjourned.

Appreciate it.