Councilmember Bowie.

Councilmember Coleman here.

Councilmember Kim?

Here.

Councilmember Joes.

Here.

Councilman President Maker?

Here.

Chair Johnson.

Here.

All seven are present.

All right.

Thank you guys.

So we have two presentations today.

One on the tax increment financing, so TIFF, and then another on the community development block grant.

So CDBG.

And first up, I have Miss Wolf who will be presenting on TIFF as well.

The presentations are attached as well for folks who are looking in.

This is item number one for discussion.

So thank you, Ms.

Wolf, for making the time over to uh come across the street here to give us this presentation.

We appreciate just you taking some of our questions in advance.

Um I think we were able to cover quite a few things in our previous conversation, but just to preface, there were several um different topics that came up throughout the year last year as a part of the budget process.

There was a TIFF district that was decertified last year, which prompted questions as well.

So I was just wanting to and more insight when it came to just learning more about the process overall and the process after decertification.

There's actually quite a few different things in here that I think will be not new information to our council members, but definitely good refreshers, especially for community members who may have been watching our TIFF presentations that we've now had every year since we've been here.

But really, really excited to hear your presentation.

Welcome, Miss Wolf.

Oh, good morning, Chair Johnson, thank you, and members of the city council.

Uh, my name is Jenny Wolf with PED.

I will be presenting today on tax increment financing with annual update information.

The summary of topics listed here is all included in my slides, but many uh will be very brief as they have been included in prior presentations.

For example, what is TIFF?

TIFF is authorized by state law and enables the HRA to capture the increased taxes to finance development that otherwise would not occur.

Here is an illustration from the State Department of Revenue that I like to use as a classic example of TIFF.

It demonstrates that when properties have declining values due to blighting factors and disinvestment, the taxing jurisdictions will benefit from a stabilized taxable value, creating a steady revenue stream, and then they'll realize the gain when the TIFF district expires, increasing the overall tax base.

How does TIFF work?

At a high level, when a new TIFF district is certified by the county, they set the original market value tax capacity that will be fixed for the taxing jurisdictions, and then they calculate the increased tax capacity each year and remit the distribution of the taxes from the increased value to the TIFF authority.

The taxes from the value in place prior to the creation of the TIFF district will continue to be sent to the taxing jurisdictions.

The local tax capacity based taxes from the increased value will be sent to the TIFF authority.

And in the case of the HRA or the port authority, all property taxes generated from other tax levies would be sent to the applicable taxing jurisdictions on the full value of the development, which includes market value-based taxes for the school district and state levied taxes for commercial properties.

This slide includes illustrations from the Office of the State Auditor reflecting the full payment of taxes by TIFF properties and the purpose of capturing the increased taxes to pay the eligible costs that enabled the development to occur.

And this slide shows a graphical depiction of the distribution of an annual tax payment.

And this is an actual, this is actually the proposed uh TIFF district graphic.

So this reflects a housing only project, so there isn't any commercial taxes, and it uh reflects a pledge of 65% of the collected tax increments to cover the eligible costs, enabling the development to occur.

And this is approximately 53%.

You can see a little over half of the pie of the total tax payment, which is the lighter blue slice, and then the remaining 35% of the collected tax increments are for admin and pooling for affordable housing, and this equates to an additional 28% of the tax payment, and that is 8% in the orange slice for admin and 20% in the gray slice for affordable housing.

This leaves 19% of the tax payment that is remitted to taxing jurisdictions.

That's the darker blue slice.

Reflect in the bar chart, the large distribution of market value-based taxes to the school district in the green bar, which in this case reflects an amount 16 times greater than without the creation of the TIFF district.

I have a question from Council President Baker.

Thanks, Chair Johnson.

First of all, as well, thank you so much.

These I feel like every time we see presentation like this, the slides get even more clear and helpful, so thank you.

And I know that one of our discussion points today is going to be that the decisions we make about that gray part of the pie chart pooling and sort of things that go beyond just helping the project happen.

Can you say a little bit more about I think the green and red and blue parts of the bar chart?

How in particular is the school district affected and not affected when a TIFF district is created?

What do they still get and what do they not still get?

Maybe is the way to phrase that question.

Thank you, Chair Johnson, Council President Naker.

So the school district is unique in that they get to determine what their tax capacity based levy will support for school operations, and then the state of Minnesota provides the difference.

What is shown here in the green is the market value base, so that's their referendum taxes, so that is outside of the state funding that.

So that's when they do a referendum for a capital project or an operating support referendum.

So this example illustrates that the school district otherwise doesn't get that revenue stream for the referendum based, and that's because market value taxes are not captured in TIFF districts.

I see.

So just to say that another way, if a property's value increases by 100,000 because of the development, the school district's levy takes into account that new 100,000, the total market value, even if it's some of it is going into a TIFF district, and gets that amount into their levy referendum.

Correct.

And then the only part where they don't receive the full value is in their normal property tax allocation that would come from the county.

Right.

The um Chair Johnson and Council President Naker, it's based on what is the tax base.

So the tax capacity base is what the school district can maximize their levy, and then the state will then, you know, cover their operating for the you know per pupil or whatever.

Um so that that's all they're protected in in TIFF, unlike you know the county and or the city.

I got it.

Okay, thank you.

Thank you.

Please continue, Ms.

Wolfe.

Um, so the next two slides just describe the two types of TIFF districts used by the HRA, a redevelopment TIF district and a housing TIFF district, both which are allowed to capture tax increments for a total of 26 years.

I will just highlight the main difference in the two when creating a new TIP district.

A redevelopment TIP district, for a redevelopment TIF district, the proposed boundaries of the TIFF district are required to exhibit qualifying conditions, including substandard buildings, and the redevelopment to occur in the district is not what's prescribed in state law, although the eligible use of tax increments is.

Thanks, Chair Johnson.

So just again to put this another way, Ms.

Wolf, make sure I understand it.

So when we are considering creating a TIFF district, what we're essentially and doing pooling, what we're essentially saying to the developer is when you create this additional tax value that we didn't have before, you will pay that full amount in taxes.

Some of it will use to pay off the debt from the project you did, and some proportion of it will use for building affordable housing in this TIP district or in the project area if it's a redevelopment TIP district somewhere else in the city.

Do so essentially, we're um we're using the carat of tax increment financing to the developer to gain this pool of dollars to be used for affordable housing that we otherwise wouldn't have.

I want to make sure I'm stating that right, and then I also is there a limit on what percentage of I guess you just said that the percentage that can be pooled is the 35% in a redevelopment tip district and 10% affordable housing.

Chair Johnson, Cultural President Naker.

So for a redevelopment TIFF district, the maximum pooling is 35%, and at least 10% of that would have to be for affordable.

We can use all of it for affordable once we cover our admin costs, and generally our admin, our admin is limited to up to 10% as well, but it's rare that we hit that limit.

So we can use you know up to the 35% for pooling for affordable housing.

And then affordable housing, any percent can be allocated to other affordable housing projects that aren't the projects that the TIP district was created for.

Correct.

Okay, thanks.

Commissioner Bowie.

Oh, sorry, Councilmember.

Chair Johnson.

Yes.

Okay.

Okay.

Chair Squeerd.

Um, I um I have a question around the 35%.

Is that like we could pull up to 35% or 35% of what is pooled can go towards the development?

Um Chair Johnson, um, Councilmember Bowie.

So it's of what the tax increments we collect is 35% of what we collect, we can then spend on admin and pooling for affordable housing.

The other 65% of what we collect has to be used for the project in the TIFF district.

So it has to reimburse the developer for their costs, or it has to actually, you know, uh pay pay for costs of the project in the TIP district.

And as a follow-up for when you say pay for cost of 65%, is that um like the developer's fee?

Is that the actual capital that goes into building the project?

And if you can just distinguish between like the 65% and the 35%, because I'm um I just want to make sure I'm hearing you correctly.

Um yeah, Chair Johnson, um, councilmember Bowie.

So um the 65% has to go to the eligible cost for that TIFF district.

So in the case of a redevelopment TIFF district, it could go to acquisition, it could go to demolition, it could go to site work, um, the developer incurs those costs and then re reimburse them over time from that 65%.

Okay, thank you.

Uh okay, so um as previously detailed, TIFF is a state authorized financing tool, and there are specific requirements that must be followed.

This is a high level list of requirements.

I'm not planning to walk through it, um, but just so you know there are statutory requirements as this is a state uh uh finance tool.

Um, so now I'm gonna talk about our existing TIF districts for pay 2026.

There are 57 TIP districts that are generating tax increment.

Um there's 47 administered by the HRA and 10 by the Port Authority.

The anticipated collections total 32.7 million with 28.5 million for the HRA districts, which is 87 percent.

Um of the 47 HRA TIFF districts generating increment, 26 are housing TIFF districts, and of those 26, 24 of those are rental housing.

Uh as shown in the past, we continuously track what percent of our tax base is captured in TIFF districts.

This slide shows a five-year history and reflects our current capture rate of 6.08 percent.

Um we do have some new TIP districts.

There's seven new districts that have been established, and we'll begin collections this year or later.

Um, six were authorized by the HRA board, and three of those are at the heights, and one was authorized by the port authority for the Fairview St.

Joe's site.

The HRA is also proposing to establish a redevelopment TIF district for the Gultier Plaza site downtown, and that item will be introduced this afternoon at the HRA board meeting.

Uh these next four slides include the specific outcomes for the HRA TIF districts that are generating increment this year or planned for future years.

I will not walk through each slide.

However, I do want to just highlight the total summary.

7400 new housing units, nearly 2 million square feet of commercial uses, over 300 hotel rooms, and 4,000 parking stalls, all within the TIFF district boundaries.

Without TIFF as a tool, these outcomes and the resulting increase in the tax pays would not have occurred.

The table here includes the unaudited collections for pay 2025.

There were 46 HRE TIFF districts and 12 port TIFF districts generating increment in 25, and the overall collections were 90% of the expected revenue.

The reduction in the actual collections to what was expected are due to petitions for the values, and some of those are a settled multi-year petitions that are settled, reducing the um the percent collected.

This slide just details the number and type of debt obligations for the HRA for pay 25.

Most of our debt obligations include pay-go notes.

These obligations do not have scheduled payments, and the HRA pledges tax increments as they are received.

There isn't any risk to the city or HRA if the collections fall short of projections.

Ms.

Wolf, can you just we're I appreciate you that we're moving through these quite quickly?

And can you actually go back to the previous slide on the collections?

And then can you just share a little bit more about so total expected total actuals as this a point in time or is this overall for the projects?

Is this like you know the collection rates?

When I'm looking at the collection rates, what does that actually what is that 86% actually mean?

Because you just kind of go through each column so people understand what this graph is actually sharing.

Uh Chair Johnson, yes.

Um, so this is just what um was received from the pay 25 tax settlement.

So we receive, you know, you pay your taxes in May and we receive those in July, the second half paid in October.

We receive in two pieces, we receive uh payment in early December, and then the county sends what's called a final cleanup payment of anything that they collect by the end of the calendar year.

So we receive that in January.

So this just reflects what we received in those three settlements uh last year, so in July, December and January of this year, compared to what the county told us we should expect to receive from our TIFF districts.

Uh, and similarly for the port authority.

Um, the reason that you would see 86% versus 94% is the petitions.

So when a TIFF district settles a petition, um the county will issue a refund, and then they'll take that refund out of our collections in that year.

So what I'm not showing you here, and I can follow up and show you, but I can tell you what was current taxes that we received, what was delinquent taxes that we received, and what was refunds that were you know reduced our collections, but that's why it's kind of variable, but it does just reflect those three settlements that the HRA received in the port.

And as a quick follow-up, just for like pay 2023, 2024 collections, like is that percentage pretty on par with where they have been as well historically.

Chair Johnson, um, I can provide that detail, but I think last year was um quite a few petitions settled for apartments.

Um, and um, so I think that was it was this year was probably a lower collection rate on our housing for sure on our housing tip districts.

Okay, thank you.

Councilmember Bowie, Chair Johnson.

Uh thank you so much.

I uh just had a question, particularly around um this slide.

When you can you define what is the tax petitions and what does no being settled or pending means?

Um, Chair Johnson, uh Councilmember Bowie.

So um so the a property owner has the right to petition the value that the county assesses, right?

So they assess they send that out in the tax statement in March.

They'll send the most current assessed value for the following pay year.

Every every property owner has the opportunity to petition that value.

Um that process is not fast.

Um it can take quite a few years.

They um there's onus on both the county and the property owner to um detail why they think their property is overvalued, and so when a petition settles, that means a refund has been issued.

When uh it's a pending petition, that means the county holds back tax increments because they think they might um send a refund before our next collection.

So the county doesn't want to be, doesn't want to send the HRA and TIFF authority the the taxes if they think they're gonna have to issue a refund.

So they'll hold back uh a pending amount, and then in the next collection, they'll settle that.

So they'll either give us the money back or they'll keep it because they did issue the refund.

So does that council president acre?

Did you have to follow?

Just a quick follow-up.

Is that process um handled through the county or is the city okay?

The county.

Thank you.

Yes, they have uh an entire board for it.

Um that I used to sit on.

But yes, council president.

Thanks, madam chair.

I'm just noticing, I'm glad you went back to the slide.

I'm noticing the difference in the amount captured from redevelopment tip districts versus housing TIFF districts, even though we have fewer redevelopment than housing TIP districts.

I'm wondering if that is because redevelopment TIP districts just end up being more valuable because they're typically taking a blighted property and creating something, some new either market rate or commercial property, and so the the change in the taxable value is just greater versus an affordable housing development where the end of the final product may not have as great of a change of tax capacity.

And I'm asking this in part because um I know we talk a lot about affordable housing TIF districts.

Redevelopment TIF districts I think tend to be more problematic for us as a body just because they're often not affordable.

They're market rate, they're um commercial, they're taking something, they're taking blight and um improving it, which is the public benefit, but they're not creating affordable housing.

But what I heard you say earlier about pooling for affordable housing from these projects and the much higher number of dollars coming in from redevelopment TIP districts.

I guess I'm wondering is it the case that redevelopment TIP districts actually have a greater impact on our ability to build affordable housing because of the huge amount of value they create, even though the project itself is not affordable housing?

And I know that was a long way of asking that question.

Uh Chair Johnson, Council President Naker.

Um I would agree with your statement.

Um I think the main driver in um the large redevelopment um TIFF collections is we have some very large TIFF districts, and those so Minnesota Event TIF district in downtown, um, that's you know 20% of our total capture.

Um, and then we have um the riverfront renaissance and we have the Emerald Gardens um out at um university and um uh I'm blanking on the uh at the border, Minneapolis and St.

Paul.

So those large, those are large redevelopment TIP districts that have contributed to pooling for affordable housing.

Um and then otherwise most housing projects are or housing tip districts, as you mentioned, are single single projects.

So they're on scale, they're never gonna create what um a large redevelopment site would create, such as um Riverfront Renaissance or Emerald Gardens, which had you know multiple blocks and Ford site, for example.

Ford site would be our next on par with Minnesota events, where by the time it's fully built out, it'll be capturing you know that 20%.

Um, so that's probably you know, I mean, but they do redevelopment tip districts, um, do have more ability to uh fund pooling for affordable housing.

Um, and they can be anywhere in the city.

So I mean, I think that's you know, two benefits there.

Thank you.

All right, moving on.

Um, so now I'll finish with the topic of decertification.

Um, so first I want to cover what is statutorily required.

All TIFF districts have a statutory length for collections, which is 26 total years for housing and redevelopment TIF districts.

State law, however, limits the spending within the TIFF district that could result in early decertification of the district.

The driver is the law that limits pooling for a redevelopment TIFF district, the maximum pooling is 35% of the tax increments.

However, pooling not only applies to expenditures outside the TIFF district boundaries, but pooling is also defined as an expenditure within the TIFF district that is after a certain date, and this date is five years from the certification date.

This therefore restricts the use of collected tax increments, and when a determination has been made that no additional spending is allowed, the TIFF district must be decertified.

In summary, for a redevelopment TIFF district, if the qualifying expenditures not deemed limited by pooling, aka in district expenditures are completed and they fall below the 65% of the actual collections, the district must be decertified.

So in the case of Westminster, the district of Port Authority decertified, so their pooling was 75% because they did not elect to do the additional 10% for affordable housing.

So they had collected enough increments to cover what were the qualifying in-district expenditures, and therefore they could no longer continue to collect, and we closed the Coke Mobile TIFF district a few years ago for that reason as well, that we could no longer uh keep it open because we did not have enough in-district expenditures.

Council President Acre.

I'm sorry, I don't understand that.

So we just have it said, it seems very important.

I'm just wondering if you could say it one more time, maybe more slowly.

I almost want to be, I almost wanted to ask here just for to basically even rephrase the question and just what is being answered.

So I think we are being walked through the statutory requirements, which I think makes sense.

And if you could just share a little bit more of like an example, maybe subbing in hypotheticals and adding in amounts and just so we can understand the percentage pieces.

I think that would be really really helpful for folks like myself who are visual learners as well.

I want to follow what you're saying, what you're sharing.

Could you give an example and could you share just like put numbers into it and the why we would potentially decertify early or not be allowed to pool anymore?

Um Chair Johnson, council um President Naker, Council members, I will try.

So it's kind of I think I've covered this before that it's more or less a math exercise, right?

So if we've collected $100, we would have to spend, or um, yeah, $100, we would have to spend $65 of that that we've collected in the district for qualifying project costs.

Um, and so that if we only had sixty-three dollars that qualified, we would have two dollars over what we could keep.

Um, and if that $63 was not gonna grow in the future because we already paid for all of the costs, we already, you know, fully reimbursed like the Westminster, the port fully paid all the obligations, that $63 was not gonna grow, and they already have $2 that they couldn't spend.

So that's when they decertify it to no longer collect going forward.

Yes, council president.

Thank you.

I understand that.

I think the five-year rule is where I got confused.

Yeah, it's uh Chair Johnson, Council President Naker.

It is, um, that was something that the state law had amended originally, and there's kind of these pre-7 pre-82 pooling or whatever.

So there was TIFF districts where they didn't limit the pooling to actually expenditures in your TIFF district, it was just everything outside of it.

So you could you could create a new expenditure in year 23 of your TIFF district if you had tax increments.

So what the state law um, how the state law was amended is they said we're gonna also limit the length of expenditures, and so that's where they created this five-year rule, and then in times where there's been, you know, like um recession or delays in developments, they extended that to 10 years.

We did that recently for the Ford TIFF district.

We extended our five-year rule to 10 years because of the delay um in building out uh the housing units at Ford site.

So we allowed ourselves more time to have those in district um costs that are not limited by pooling.

So put another way, maybe um this five-year rule made it even more difficult to reach our $65 that we had to spend previously.

We could sort of come up with another project that could use those two dollars, but now we can't after five years that the district was started, and so when we reach when we can't spend sixty-five anymore, we have to close it, and that's harder, easier to reach.

Yeah, correct.

And so just to be clear too, like on this example, and also from my understanding, the 65, like in this case, it would be $65 that are given.

And is that annually?

Would that be an annual piece?

Or just overall, there'd be $65.

Overall, total.

Total if you're total collected.

So you don't um Chair Johnson, um, if you if you're still incurring um in district costs like you're paying back debt, you can exceed that 65% or be lower than it, but once once you've incurred the last cost, or you think you're going to, like you can project forward and say, well, I think we're gonna have more than what we can spend, um, then you would start setting aside those tax dollars to pay off your in-district costs, um, but it it it's annual, or it's cumulative through the life of the district, um, it's not it's not an annual measurement.

So, okay, thank you.

Councilmember Bowie, sorry.

Yes, Chair Johnson.

Um, I just have another question.

Just just trying to get the the picture clearer, um, with using the example that you gave, but I also want to just ask in a different type of version.

Um, so like my understanding when a developer is building a project, those like the cost could be pretty stationary, but until you start actually developing, there's some flexibility with those numbers, uh, but what we whatever we certify is like that ceiling.

So if you're saying like the hundred dollars, but we can only reimburse up to 65.

Um, so are you saying if they if a developer does not incur up to that ceiling that's 65, and that's will we decertify?

So does that mean if a development actually costs less than you know the the commission or the HRA commission is more incentivized to decertify that, or if a project takes longer?

Um I'm just trying to understand like what are the factors that goes into those decisions.

Um Chair Johnson um Councilmember Bowie.

Um that's a good question.

So most of the talk about if we have all these costs and we we don't have enough are probably more for um like phase developments like the Ford site.

Um so I'll give an example um which the the pie chart that I show here, which is you know what's proposed for the Gultier Plaza, right?

So the developer will have to demonstrate that they had the eligible costs once the project's done, and that'll set the principal amount that we'll reimburse over time with the 65% that we collect plus interest.

So what could happen in that case is the collections could come in greater than we expected, and we would we would still give 65%, but we may pay that obligation off in 15 years, and so in that would be an instance where we've paid it off, that's our only in-district cost, and now we have to close the district because we maximized the pooling, we kept 35%, we gave them only 65%.

Um it's um if the development does cost less and we end up reducing the amount of the principal amount of a note, that could be a factor as well, but we would still be sending them 65% to pay that note back.

Um so I think the um I think the good the best way to look at it is is it's generally collections come in quicker, you know.

So if we set up an obligation to pay off over the life of the TIF district with our projections, and the collections come in faster or greater, you know, um that obligation pays off early, and that's when we would have a situation where we have to close the district early, all right.

And I see a question from council president Eaker as well, and then I have just a quick clarifying question as well.

Um, thank thanks to everyone for your patience with all of these questions.

I really appreciate Ms.

Wolfier's explanation.

So 35% is the max that we can pool for affordable housing.

What if we had decided for this particular project we're only gonna pool 10% and the 90% is going to the eligible project costs?

Can how would this apply in that case?

Would it be that once we've like the 90% has to be the amount that we pay to the project for the life of the project, and as soon as that's done we close, or if collections were coming in higher, could we go back down to 65% and use the extra for more pooling than we expected?

Um Chair Johnson Council President Acre, so our development agreements and our um our TIFF notes call out the pledge, so we can't change it once we've issued that note.

So if we're pledging 90% because we expect to only you know keep the 10%, um, and that note pays off early, and the reason it pays off early is because we've collected more tax increments or quicker.

We maybe would not have incurred as much interest.

So two things could happen.

We might have room in our TIFF budget that we could still collect tax increments, and then do pooling at the end.

So once the developer's note is paid off, but it'll depend on what the TIFF plan budget, what condition it's in at the time that happens.

Um an example of that is the Shepherd Daven Rental Housing TIFF district, where that note paid off early, and I and we brought forward an amendment that was approved by HRA board and city council to increase the budget in the TIFF plan and allow us to continue to capture tax increments and use those exclusively for additional affordable housing anywhere in the city because that TIFF district performed better than what was expected.

Thank you.

Even though we had pledged 90%, yep.

All right, I actually took my second half of the question, so I was like, okay, I don't have a follow-up, we can continue.

Okay, I think I've covered the statutory reasons.

So now I'm going to cover if not statutorily required, should the HRA elect to close a district early.

First, I want to just state that the HRA only keeps a district open to pool for affordable housing.

So if a TIFF district has met its development objectives and covered all obligations, it can be closed early even if pooling opportunities exist.

Alternatively, a district may be kept open to pool tax increments for qualifying housing projects.

And those that housing TIF district, though I'll just say has to remain income restricted for us to continue to collect tax increments.

And this was shown on a few slides back with an available balance of 1.828 million to be expended on qualifying affordable housing projects and is expected to generate 500,000 per year going forward and has a final collection year of 2031.

But for the HRA board and city council's decision to amend that TIFF district and keep it open, we would not have those dollars existing today, the 1.828 million, or the ongoing half a million dollars each year into 2031 being the statutory final collection year.

And we only keep a district open to pool for affordable.

Upon decertification, the tax capacity captured in the TIFF district becomes available for the taxing jurisdictions, and I have a graphic from the state auditor that I'd like to show you.

So this shows the impact on the city tax rate with TIFF and without TIFF, and without TIFF is the district is decertified.

The tax rate would decline, all things equal.

On the other hand, the release tax capacity could result in an increase to the levy, and then while maintaining the same tax rate.

So you basically have two, yeah, well, two somewhat two options.

If you want to reduce taxes, you don't raise the levy and you uh allow the tax rate to fall because you have a greater tax capacity, all things equal, just looking at a TIFF district when it expires, or you increase the levy to capture that increased tax capacity from the decertifying TIFF district.

Um, so for pay 2026, the HRA has 47 TIFF districts, and of those 47, we have five that have obligations that were fully paid by the end of last year.

Um we have two housing TIFF districts, the aforementioned Shepherd Davern, and then we also have Highland Point housing TIFF district.

Also, has paid off its TIFF note early and has enough budget, so it hasn't had to come forward to be amended, and we are continuing to collect and retain those dollars for pooling for affordable housing.

And on the slide earlier, I think I think I showed about 500,000 from that one.

Uh I would have to go back.

Um so anyway, so so there is a balance shown.

Um, that one only generates about two seventy a year.

Um, and then we have three sub-districts within the redevelopment riverfront renaissance redevelopment TIFF district, um, which TIFF district includes two additional subdistricts that have existing debt obligations, the upper landing and the U.S.

bank.

Um, the final collection year for the riverfront renaissance is coming up here in 2028.

Um, we do have uh five districts or sub-districts that I'm expecting to pay their obligations in full this year in 2026, um, allowing early decertification.

Um, this is the Emerald Park Redevelopment TIFF with three subdistricts, the Phalan Village uncommitted subdistrict, and the Pioneer Endicott redevelopment TIFF district downtown here.

Um as previously mentioned, we may collect and spend tax increments from housing and redevelopment TIFF districts if legally permissible after debt is retired.

For the five districts that I just mentioned, future HRA action will be needed to authorize early decertification.

This is required because we have maximized our pooling from those three districts or subdistricts.

So now I'm gonna show the districts that are decertifying by their statutory terms, and those three that I just mentioned, we will be proposing some HRA board action to decertify those early.

And then this table shows the anticipated capture tax capacity projections when accounting for decertifications and accounting for new TIFF coming online.

And this goes through 2034 tax pay year.

Lastly, I will provide a very high level impact for pay 27 with the districts that will decertify as of 1231 26, either by their statutory term or early, as mentioned.

When a TIF district is closed, the captured tax capacity is returned to the tax base and could result in a reduction in the city tax rate, as was shown in that graphic if the levy is not increased.

A rough estimate is that this would be a nine $9.11 per year in city taxes for a median-valued home from those that are statutorily expiring.

So those that are required to close because they've met their term.

And then a reduction of $18.27 per year when including the early decertification of the three districts listed.

The $18.27 represents 1.26% reduction of the annual tax payment to the city.

And this is a median value home, and it's based on pay 26 information.

But we don't have any information yet for P27, of course.

So just wanted to give that example that that's what we're talking about in terms of impacts.

Okay.

So Ms.

Wolf, can you just simply share at least for the last couple of slides?

And simple terms.

So we have a couple of different TIFF districts that will most likely be brought forward for early decertification.

We look at the project projected release tax capacity, like what a lot of this actually translates to, and then also just what would happen what happens to the financing afterwards.

What happens to the like the total amounts?

Do they shift now downward, upward?

Like what exactly do the last few slides mean in simple language?

Chair Johnson, so the when a TIFF district is decertified, that means that those properties in the TIFF district will no longer the taxes increased taxes will no longer be sent to the HRA as a TIFF authority.

They will be part of the overall tax base.

So we will no longer collect tax increments from that TIF district.

Um we still have money that we've retained, we still have reporting requirements, we still have to spend all of those dollars we have have collected in accordance with the adopted TIFF plan and the requirements.

So it doesn't change the spending side, but we will no longer collect additional tax increments.

Right, so and in regards to that, and in short, just also making it sure that we understand it doesn't change the the overall like the tax value itself is just basically rolling back on to the normal tax base.

We just aren't collecting as the city.

Correct.

Yep.

Okay, yep.

Yep.

Council President.

Thanks, Madam Chair.

I have two questions from the whole presentation.

Um Ms.

Wolf, once a district can decertify early.

Obviously, when it has to decertify, you're coming to us, right?

But when it can but doesn't have to decertify early, do you come to us to ask whether or not we want to decertify early?

Like and to and give us kind of the pros and cons of that decision.

In other words, this is how much we would continue to pull for affordable housing if you kept it open.

This is how much would go back to the tax base if you didn't.

Um, Chair Johnson, Council President Naker.

I have not, so an example of that is the Highland Point housing tip district that paid its obligation off early.

We've been just continuing to we know the project is affordable, it's income restricted due to tax credits.

Um so we've continued to collect those dollars, and we're reflecting those as available for furthering affordable housing in our community.

So our PED resource team keeps track of that, and that's what they identify for a project that's looking for money.

Um and then that project that request would come to the HRA board.

But I have not came to the HRA board to say, do you want to close this or keep it open?

So just to my colleagues, that might be something we want to consider as a policy change.

If we I think one of the reasons we had this briefing was because we've gotten questions from folks in the community about TIF districts staying open, closing, so we might want to have that decision point as a matter of policy.

I'm just I'm just bringing it up.

Um and then my other question, Ms.

Wolf is how how do we decide on any given TIP district when we're establishing it how much to pool for affordable housing?

Do we always just do the 35% because that gives us the most flexibility or is that a decision point?

Um Chair Johnson, Council President Naker.

Um so our HRA application does put forward um TIFF guidelines, and it mentions that uh uh criteria is to pool 25% for affordable housing as applicable, and we've used that as applicable to mean if the project isn't producing its own affordable that it would be applicable to pool.

Um, and then it's uh we start at the maximum, and then we can ratchet down from that if the project isn't gonna happen, right?

So so it's kind of uh how much do we need to give so the project still happens?

Um and that comes to us when we approve the TIFF district, that percentage of pooling is part of that, and you explain why the number was set where it was.

Yes, correct.

Can you also share a little bit more about the application process?

So what happens?

We have an application, we have these pieces, but on the back end as well when it comes through to what exactly does that look like on the back end?

What are the steps to get it to the final piece before it comes to the board?

Um Chair Johnson, so um if it's a um housing project, um it'll start with the housing director.

Um, Jules Otagina.

Um he will discuss the project.

We don't fixate on TIFF when a project comes forward.

We evaluate the project itself, um, and then we you know determine what is the best course to have it happen.

Um our application does um include a request for TIFF, but we don't solely say that that's the only thing we're gonna look at.

Um so for projects that there's other funding sources out there.

If it is um does have affordable components, we would be looking for it to go to other funders as well.

Um if it's a market rate project, we might be looking for it to apply for pass-through grants or other sources as well.

Um of the determinations that has to be made if it's a redevelopment TIF district is that the site even qualifies.

As I mentioned, a redevelopment TIFF district can only qualify based on its current conditions.

So if it doesn't meet that requirement, then we're kind of end a conversation.

Um the developer has to pay for that cost of that study.

Um, and if they, and we won't do that until we receive an application, so they would have to submit the application to the HRA requesting that we establish the TIFF district, um, and then we would uh work to get this the report um from LHB that says it can qualify.

Then we would engage our municipal advisor to talk about the project and make sure that they actually need a subsidy for the project to happen, meeting the butt for test, um, and that's under the assumption that we really don't have other tools at our in our toolbox for for non-affordable housing.

Um, and TIFF is one of those tools.

So, um, so that's kind of where the TIFF is the more the focus.

Alright, I see a couple questions that have popped up.

Council member Coleman, I'll start here and then I'll go to Councilmember Bowie.

Thanks, Chair.

Thanks so much, Ms.

Wolf.

This presentation is really helpful.

I'm going back to the tax capacity captured in TIFF slide.

And I'm just curious about these five-year trends.

I think that they it's super helpful to see these.

It feels like they don't totally match the what the public narrative has been around our use of TIFF in the city.

And so I guess curious for any thoughts you have on this slide or any like color commentary you want to add.

But specifically, I guess I'm wondering about well, sorry, and I had gone back even further to the tax the one about the last five years rather than the next five years, but there's definitely overlap between the two.

I guess I'm curious if you could just kind of comment on if that's been a result of the projects that have been available to the city.

If you feel like that's been a result of intentional decision making by the HRA board or others within PED to kind of go down, and then a separate question that's less commentary, more just fact-based is um, is it 10% of the city's tax base that can be captured by TIFF?

Is that and is that a legal requirement or is that a city policy?

Could you touch on that a little bit?

Um Chair Johnson, Councilmember Coleman.

Um the 10% is not of any state law, and that is something that um came out of the finance office many many years ago in talking with the credit rating agencies in order for the city to maintain its triple A credit rating.

Um the rating agency looks at what is their capacity to levy taxes, and so if it's captured in TIFF, they can't levy taxes on that because they're looking at you know their um geo bond credit rating, right?

So they are pledging the full faith and credit and taxing powers of the city.

So if they have um more than 10% captured in TIFF, that might be a reason to not um give the triple A rating.

Um so that's where the 10% comes from.

Um it has been um something that has been measured every year, and it's used when we're when we receive requests, it's used to project going forward.

Um the I think this slide here shows um you know two things.

The Great Recession, you know, in in the late 2000s, and the declining values, and I think not until maybe 2019 did we actually recover to where we had been.

Um so obviously with declining values that puts a lot of pressure on um on that percentage.

Um, so the percentage um has been shrinking all things equal every year since then, since um values recovered because now values have been gaining.

Um and you can see here that the city's tax rate or tax base has been growing until between 24 and 25.

Um, and then the TIFF percent change has been growing but not as much, or actually declined.

And the reason the decline you'll see is because the TIFF district um was decertified.

You know, that's gonna be a reason why um you'll see a decline there.

So from 24 to 25, um that probably Williams Hill with the port and the Coke Mobile with this with the HRA are reasons why that um and then also just declining values.

Um I think you know, we're our TIFF districts are largely um I would say more rental and commercial than ownership housing.

Um, whereas the city's tax base is more ownership housing.

So that might be where if you see a reduction in one, it doesn't mirror the other.

Um I've tried to kind of look and see you know the makeup of it, but it it's uh you know it's hit or miss.

So um, but so yes, the narrative has been that we're that we're you know including more TIFF than um than what we should.

Um, but if we compare to the 10%, we are not clearly.

All right, I'm gonna go uh to Councilmember Bowie and then I'll have Council Breeding ask the last question only because I want to get us to the second part of the presentation as well.

Yeah, I yeah, I I see you.

I'm you're gonna be the last question.

Um, and so we'll do those two and then we'll end this part.

And if you have follow-ups, I think Miss Wolf is willing to talk about TIFF any day.

I do appreciate um being able to have this kind of come back through this body.

I think one piece that wasn't necessarily touched on in the presentation that would be helpful, especially when we're thinking about the respective TIFF areas.

So when port TIFF is decertified, when housing TIFT is decertified, redevelopment TIF, to whom does the if there's any resources or uh left over pool TIFF that needs to be allocated or utilized, to whom has the authority to do that and like what is the process when there is a balance left that can be utilized.

This was a topic for discussion last year because a port district TIFF had rolled over and there were uh there was I think amounts left that the question was whether or not that could be brought on to the end of the budget cycle to be used for um council purposes, and it was like actually we're gonna roll this back into the general levy to relieve uh relieve the cyber attack um deficit that we were left in as a city, but it didn't require council approval.

Um, and so just kind of sharing a little bit more about like what that process looks like on the back end for each one could be sent probably as a follow-up because I think it would be helpful um and pertinent to the conversation, especially surrounding the budget.

Um Chair Johnson, I'll just add real quick, and I will send that, but I'll just add real quick as you saw from the actual collections slide for page 25, we did not collect what we expected, right?

And that was because of the refunds.

So when a TIF district is decertified, so if it was decertified for 25, was its last collection year, the county can issue a refund for those 25 taxes for up to three years later.

So that causes um a resulting holding on to dollars until you know they're not gonna be captured back.

Um so Coke Mobile was was decertified 2024.

Um we still have one more year of where we could, and we got a negative collection in 25 because refunds were issued.

We could still get a negative collection.

And so until we we um are assured that we're not gonna be um sitting there with the HRE General Fund having to bail out a TIF district because we closed it and returned the dollars.

Um, that's you know, why there isn't an immediate here you go.

I think um you could ask the port authority what kind of analysis they did to make sure with Westminster they were comfortable returning what they did because I know they did that analysis because they too have been um hit with uh negative collections due to refunds being issued.

So but I can follow up with them.

Okay, thank you.

Yeah, and I appreciate that clarity as well that that is helpful just to visualize and to take in.

Um, and I think for the port, it's like yes, that clarification, and then also when a refund is when they return the funding back to the city, the ultimately what is the process on the back end for that.

Um, so we'll Commissioner Boo or sorry, Councilmember Bowie and then Councilmore Yang, and then we'll wrap.

Thank you, Chair Johnson, and thank you so much uh Miss Wolf for just like your your wealth of knowledge and the patience as we're you know asking you to kind of reiterate yourself and um you know dive deeper into this topic.

I just want I definitely want to follow up and I'll make sure I can send some emails or some questions, particularly around the follow-up, and I know we're gonna have more of these conversations um in the future in terms of you know how the taxes are collected and like what's captured, and I know especially in my war, there's a couple of TIFF districts that's been um brought forth in terms of um certain blighted areas.

On that note, um, and you talked about um just like some past examples.

I'm just really curious as to learn more about, you know, what was the rationale um with the city going in a direction where we um source out a third party um to be able to determine blight.

Um, and I asked this question just because as we're, you know, just going over all the different reasons and scenarios of when TIFF districts were designed, it really appears as if it's like it's driven by the developer, right?

The developer has an area, they want to build a project, they have the capital, they already know the language, they're you know familiar with this as a financing tool, and they have that relationship or make that um uh request through the city.

Uh, but for certain areas that you know maybe that is very blighted, like for example, the Sears site or the Kmart site, or you know, like have the city has recognized mass blight, um, where developers have not looked at, you know, investing in that area.

Where do you see in terms of like the city um on its own really leading or taking leadership in terms of trying to create a TIP district, or is that solely on that developer uh requesting that um that TIF district?

Um Chair Johnson, Councilman Rabui.

Um I think at times the city has taken on um determining blight, and I can say we did that with the Ford site.

Um we did that because Ford was going to start demolishing buildings, and unless we made the determination of blighting conditions without a developer at hand, um, we would have lost that tool in our toolbox to help with redeveloping the site.

So it it has happened, but not not very often.

I mean, I think it's for for something large and impactful, and the Sears site is probably um along those lines as well.

Um, and so yes, the city could, you know, take that on.

We could engage, we always engage a third party because they're the experts in the field, um, but we could engage that without um a developer, and then we could, you know, make those determinations and findings.

Thank you.

Thank you.

Uh Council Vice President.

Yay.

Thanks, Chair Johnson.

Uh, Jenny, I really appreciate the presentation today, even if this is like my seventh refresher on TIFF, I am always learning, getting clarification from you.

So I encourage you to continue doing this for the council.

I just have a um, I want to go back to something that the council president said earlier, which is uh around this question on policy for the pooling.

For me, I do want to share with folks that I'm interested in in making sure that when there is a district that can be up for decertification, that we do get info about it, even if in the end we don't decide to just decertify it and instead do the pooling instead.

It'd just be helpful to understand that.

Um, and I I remember when Insight St.

Paul came sometime last year and said, hey, the council should consider decertifying these, you know, this handful of districts that I didn't realize that that we could have done that.

And so it was new information for me that I I believe is really um important for the council to understand in terms well for transparency and for us to be able to decide what are the trade-offs that we would want to make um in a in a decision like that, knowing that this isn't this is an opportunity for us to reduce um the amount that we could be putting on to um our property owners when it comes to the levy.

Um and at the same time, if we decided to do the pooling, it's more money for affordable housing.

And so I it seems like maybe this might be like in how we're operating now, it's an unwritten practice or policy that PD's um PD's following, which I'm very supportive of.

I don't think in my seven years here that it was something that the council voted on.

However, um it would be helpful to understand is this something that we need to do need to have a written policy for if we were to decide to operate differently from from here on out.

So if you can clarify that, that'd be really helpful overall.

Again, I I wanted to name I'm very supportive of the pooling.

I think we're just in a I would say a very difficult time with with um the tax burden that we're often hearing from residents and just figuring out how do we close our budget, and so I would love to get all the information.

Um Chair Johnson, um, vice president um thing.

Um I I think that's something that we can discuss with PED leadership.

Um I'll just share that you know, the housing team has, you know, full-on applications for projects within the city and desires from developers, that's about you know 24 projects long, um, requesting, you know, tens of millions of dollars um from us, and they're all chasing the same dollars.

Um, but we can talk internally about um what kind of information to put together for that.

Um I mean I'm sorry, it's not to interrupt you in the response.

However, I do see Director McMahon in the audience, and I do want to have a chance you shared with PED leadership.

So I'm actually gonna ask if uh Director McMahon would also just be able to come.

I think this is an important question for this topic.

For I think it's a practice piece that council vice president is asking.

And so we're just wondering around, you know, whether or not this is a I think this seems like it's a piece of whether it has to be a resolution or does it have to be something that HRA or the city council would take formal action on is something that would just be worked on in partnership.

Hi, Chair Council members, thank you.

Um I think it's something that we've worked on in partnership.

State law is pretty prescriptive.

And so when we're talking about policies and sort of rules and guidelines to follow, state law being as prescriptive as it is with TIFF is really the benchmark, right?

To make sure that we're following and working under.

Within that, we do have practices, standard practices that we've done over the years, and those are things that always in discussion, right?

Continuing with you all.

They're things that also impact other departments when we talk about you know the 10% and things like that.

So it really is is a larger conversation and sometimes site specific.

And so those those general practices and guidelines that we have internally guide our work, and again, state statute is really the policy framework, if you will, to ensure that we're working under.

And so if a TIFF district is looking to decertify, and there is maybe well, if we have an opportunity to decertify tax uh TIP district, especially if it's maybe in the ward of that council member, is there an ability for the council members to be notified about that, even if the ultimate decision is to leave it open?

Uh chair council members, yeah, absolutely.

And right to have the continued conversation about what districts are in each ward and throughout, you know, throughout the course of the term, actually, right?

Like where is it in process?

I think it's a conversation before certifying a district as well, because that's what really you know establishes the spend plan.

So it's a conversation in the ward if there were to be a new TIFF district established.

That's part of the conversation with policymaker, as well as during the course of the term kind of status and where it is along along the overall years of the term.

I did say this was gonna be the last question.

I so I'm gonna hold us to that just because I do want to be able to have uh Beth come up and talk about CDBG Director McMahon, but I appreciate that clarification.

I think it's just opportunities.

You know, I didn't want to talk about PED leadership with you sitting in the room to be able to just ask.

Um I think when we have opportunities to not have to prescribe things to the form of a resolution or to a um policy, direct policy change because we can just operate with that practice in mind.

I think that's always a great opportunity to capitalize on.

So thank you, Council Vice President, for raising the question, and thank you for coming up and being put on the spot, Director McMahon.

Of course, thank you.

Okay, okay.

I'll welcome up Beth at this time um to talk about the community development block grant.

Good morning, Chair Johnson, council members.

Um, my name is Beth Elric.

I'm the grants administrator for PED.

Uh work on our um federal, state and regional grants, but here to talk about our federal grants C2BG.

Um so our team uh in PED for federal grants um is comprised of our CFO um Deputy Director Nicole Green, um, myself as the grants administrator, uh, grants compliance supervisor Jessica Deegan, and then we have three specialists that work with our partners and our city departments, Austria Zong, and Chu.

And our um our team manages um not only CDBG, but there's three entitlement grants through HUD that include our home partnership program and our emergency solutions grant as well.

Um all of our funds are um allocated through uh the consolidated plan.

Um consolidated plan is a five-year plan.

Um our most recent one just started in 2025.

We program cycle is June 1 through May 31st.

We approve our annual action plan around April every year.

So you would have recently saw the 26 plan come through in April.

So most recently were development of new housing, housing rehabilitation, economic development, some public services, public improvements, and some remediation of substandard properties are the ones that are in our 25 and 29 plan.

And this will guide all five plans under that annual action plan for 25 to 29.

When working with CDBG, we always have to meet national objectives that is in the regulations.

Most frequently, and required, we have to spend no less than 70% of our funds on low to moderate uh income activities, and that can be achieved through area benefit, through low to moderate income housing, limited clientele, which means a select population, that is at or below 80% area medium income, and then we can create jobs for uh low to moderate income individuals as well.

Um the remaining 30 percent can be spent on uh slum blight activities, and again um we can be done in an area or a spot basis.

We do not have a certified area in St.

Paul, so all of our slum blight activities are on a spot.

Um you can also spend these type of dollars on urgent need.

Um we have not had that type of need.

Um we don't see hurricanes and you know natural disasters, not that it can't happen, it just hasn't.

Um, so our HUD formula grants um have been uh not keeping up with inflation and actually declining a little bit.

Um so this uh graphic just shows our 2026 allocation allocation at 6.7 million, just a little over.

Um, our home uh declined at 1.3 this year, and our emergency solution holds pretty steady at just over half million.

So, what we can expect for 2027, um this administration's been a little hard to project.

Um, the president's budget came in with a significant um decrease to uh the civilian agencies and it actually proposed zeroing out any funding for CDBG and home.

However, um May 21st, the um House Transportation Housing and Urban Development Rated Agencies Appropriation Subcommittee, uh voted to advance their spending bill, which provided level funding for CDBG, so they restored it in the budget.

Um, however, it did come with a 60% cut to our home program uh and a six percent cut to ESG.

Um, one thing that was positive out of the bill um was that they are proposing that um a regulation called Baba by America and Build America Build America by America would be exempt to CDBG and home uh projects for 27 and prior years.

Um this particular regulation's been causing a little bit of uh delay and uh increasing costs for some of our projects that we've been funding with these grants, um, so that would be a welcome change.

And then the Senate has not proposed yet, and they don't have a date, at least when I checked last, um so we are still waiting for what their bill is gonna look like.

I see a question from council president maker.

Thanks, Chair Johnson.

Just to clarify, um, and I'm sorry if I missed this.

The Trump administration proposed zero dollars in funding for CDBG at home, meaning zero dollars at all or zero increase, zero dollars at all, basically cutting eliminating the C2BG home.

And the Transportation Housing Urban Development Committee is recommending that funding remain level with last year.

For C2BG, for C BG and the 6th, okay.

Yeah, so um, if we look back at what happened in 2026 funding, president's budget zeroed it out.

Um the both the Senate and housing had put in some form of funding.

Um CDBG is typically very has wide bipartisan support.

It's um, you know, widely used in all of our states, all of our areas, and there's been a couple of uh home uh housing, affordable housing bills that have been proposed.

Um, a lot of policy work that's been done in the last year, nothing that's been you know approved and put in place yet, but um there's wide support behind these type or you know the activities that these bill or these funds support.

Um so prior to uh the new administration um had had a proposed rule that was about ready to be uh put into effect, however, all rules were suspended.

Um, this would proposed rule um would change our timeliness, um, which is something that I know uh you folks have uh had um some interest around is our timeliness and our spending.

Um we are hoping that at some point this rule will get released and put in effect, but right now it's still still pending.

Um so just you know, what is timeliness?

Uh basically 60 days prior to the end of our program year.

So our program starts June 1, which means um by April 1st, we have to have no more than one and a half times our uh annual grant, so our most recent annual grant on hand, and that includes um grant amount plus program income in our line of credit, so that's the system through um HUD that uh tracks our dollars, so um we need to be below that one and a half time amount in order to uh be considered timely, and then um if we are not timely, that's when you hear the word spend down.

Um, so what causes us to not be timely is um sometimes so it's increased or unused funding.

Um increased funding would be when we get program income.

Sometimes we'll have uh large projects that have been financed in previous years.

Um they'll pay off to refinance or um just payoff early because sometimes they're selling.

Um so that would increase a large chunk of dollars coming back.

Um we have returned funds from programs or projects that aren't used.

Some projects um don't actually go, so they um won't use the funds reserved, or um they won't spend as much money as they thought they did in some of the programs and no return funds that way.

Um when we have that, uh we'll introduce some out of cycle projects, and those funding requests either come through the PE DHRA application for funds, or um sometimes we'll get the funding requests through other departments, so our um funding is mostly allocated through the city's biannual CIB process.

Uh we get roughly $6.7 million in CDBG.

Um CIB allocates about $4 million of that each year.

Um, and we we budget, so we we can safely say we budget four million a year.

Um the remaining funds are um we are allowed to spend 20% on admin, and then uh 15% on public services.

So the four million um is in plan one of the two year, so they do it for a two-year process.

Um we have a question from Council President Acre.

Thanks, Chair Johnson.

Um did you say that we have that there's a the 15 percent is the max that we can spend on non-capital, um right, correct, on public services.

You said program, but does that mean?

I guess I'm wondering is the amount that we're sending through CIB the amount that we have to send through CIB?

Could we could we choose to use more of CDBG on non-capital and allocated ourselves, for example?

Chair Johnson, Council President Acre.

Um, we are um required to spend no more than 15% on public services and no more than 20% on admin.

The remaining amount isn't required to go through CIB, but it is required to have some kind of allocation process.

So CIB process has been what was established many years ago, but it isn't the only process available to be used, it's just what we we have used.

Thank you.

Can you repeat those percentages for me?

No more than 20% of the grant amount on administration, and no more than 15% on public services.

Okay, thank you.

So this little bar chart just um shows what our allocation looks like.

Um we um have been getting uh less dollars than we used to in the past, and when you consider uh inflation and the decrease in funding, um obviously there is way more need than we have funds available to address.

Um currently the non-capital funds that we're using in CDBG um are capital city youth employment, so that's our commonly known as right track.

Um so our parks department runs that program $540,000 in 26 is going to fund that.

Um and then 100,000 goes through public health Ramsey County, um, the Black Nurse Program.

So those are currently the only two public service dollars that we use per 26.

And then we use uh roughly 1.4 uh for program administration that's mainly spent by PED and the city attorney's office, um, and then PED also spends what we call um project delivery or what HUD calls project delivery.

We call them direct project costs, um, and that's about another 435,000 dollars that is spent out of the grant.

All right, I have a follow-up question from Councilmember Coleman.

Thanks, Chair.

Just a quick question on this.

How do those spending totals compare to that 15 and 20 percent respectively?

Are we hitting that threshold or are we do we have some room to wiggle?

Chair Johnson, uh Councilmember Coleman, we are well below our 15 percent cool.

Thank you.

Um, as a follow-up as well.

Um, I believe the district councils counted under this historically, and just wondering where um or if we had alternative where that 300,000 went within this model for this year.

Yep, um, Chair Johnson.

Um district councils were previously considered in our public service budget for 345,000.

Um in 2026, those funds through the consolidated plan process that you approved in April um were allocated to some additional projects.

Um I'll identify them on a slide later here, but it would went to two projects that did not make um the funding requests through CIB.

One was the North End Neighborhood Organization's business program, and it um also increased the amount that went to uh neighbor works because CIB had only allocated 85,000 and we were able to uh restore some of their funding.

No.

Yes, uh Council President Acre.

Thanks, Chair Johnson.

Following up on Ms.

Coleman's question, it does look I think it's 900,000 would be the 15 percent of the six million, and we are well below that in terms of the program expenses or services.

Um how would the decision what would be the mechanism to decide that we didn't want that we only wanted 85% of the dollars to go through the CIB process versus being allocated by the council?

So we would need to make a decision basically prior to the two-year process for CIB, which I know is gonna be coming up this next year because this last one allocated um 26 and 27 or recommended 26 and 27.

Um, so if there'd want to be a change, that would be the time to make that change for the 4 million that's already been allocated.

For any additional funds that would be available, so like the 345,000 that we know is there for has not been allocated for 27.

We would it's up for discussion.

I mean, we don't have a process to allocate that 345.

Um we knew we had the extra money, so that's why it came through the annual action plan the way it did this time.

So it was proposed and available for you through the action plan process.

If there is a different process that you know we're considering, we can definitely um consider options.

We do need to follow federal procurement.

So there, you know, we would need to make sure that we're whatever process it is meets those guidelines.

I know that the public hearing, I think, on some of these items with the CAB's recommendations, I believe, are going to be taking place on the 8th of June, I think, is when they're doing some of the recommendations for certain projects.

But can you share a little bit about how like, for example, I have a couple of different um organizations that have come to me, it's with youth complex ideas or community center ideas, and so I just wanted to just ask like how does you know some of these are broader, big, I would say bigger programs, and then some of them are specific projects that are maybe happening in a particular area.

How do they get to this stage when it comes to just like for example like the the community center allocation?

If there are other folks that are wanting to think about how to make sure that they're able to get through the process for CIB and to be considered, what does that look like?

Um so OFS owns the process, so um, on how they approach CIB, that's a question we need to provide to or we need to pose to the CIB staff and OFS.

Um I have an idea, but I can't you know speak for it.

Um so the process that's coming up this year isn't for CDBG because our process occurred previously, so we'll be on the the next year because we're every two years they do the community process one year CIB um C DBG the next year for two years at a time each way.

Um the so PED we actually compete in that CIB process with our partners and other city departments for that four million dollars.

Um so uh occasionally, depending on the project, if it fits the program that we we have allocated funds for, um they could make applications to PED for um the funds that we have.

And we don't have a community center obviously program, um, but they're occasionally we do have returned funds, you know, like I said, those auto cycle projects.

When that um happens, we usually notify OFS.

Um, that's when we get those um requests through other departments, it's how we funded some of like North End Community Center was uh recipient, you know, a few years ago because we had uh some projects after COVID that didn't go, so we had some extra funds we were able to help out our uh other departments with some of their capital projects.

Okay, and I guess just one final question.

Um, looking back at the goals that are just from the consolidated plan, and I know approving the consolidated plan happens, but um from a I guess from a from a under from my understanding, how do we determine like where we spend those resources um per goal?

So, like for example, I see housing rehabilitation on the goals.

I'm just not aware of the housing and rehabilitation investments that we currently have internally, so I'm just wondering what does that look like when we say those goals when we approve those plans?

What exactly because we don't like I think our rehab program was discontinued, I think.

Um so I'm just wondering how does that match up?

Sure.

So um our five year plan has an extensive community engagement process, it takes about a year.

Um, the neighborhood and community, um, you know, that community engagement that takes place, that's where those goals get identified.

So it's you know where we see the needs, and there's also like this whole needs analysis that gets done.

Um I can definitely um provide you more information at a later time on the consolidated plan process.

But so those are identified there.

Um in our annual action plan, um, which takes place every year, um, it's a quicker three month engagement process um that identifies where we're going to allocate those funds.

Um, the funds have to match up with those goals, but they don't necessarily have to fund all of those goals.

Sure.

Um PED in our multifamily uh project that we ask for funds for, um, does some housing rehabilitation.

So there is um in the multifamily, we have that.

We did suspend our single family.

Um, but just because we suspend suspended the activity doesn't mean that the need and the goal still isn't in the plan.

Okay.

And the annual action plan comes when?

Sorry.

When is the annual action plan coming?

Um, so it usually um shows up on a council agenda in April.

So the previous action, so it wouldn't it would be for next year.

So in April, you just approved to 26 because be again our we run different than the regular city budget.

Our program year is June one to May 31st.

Okay, thank you.

All right.

I appreciate that as well.

And you took you coming in and talking about this too.

I think if folks have follow-up questions, would we direct them to you or to deput to the director green or I'm happy to answer any any questions?

So, yeah, Chair Johnson, whatever whatever questions your team has, just send them my way.

Sounds good.

Thank you.

Thanks.

Okay, with that, um, just a quick thing for folks who I have you, is just you'll be getting an email from all of us about uh the budget meeting dates and things that will be coming, and so keep a lookout for that.

Otherwise, we are adjourned.