CC_Minutes_2008_0908 - Laserfiche WebLink

Home

Regular City Council Meeting Monday, September 08, 2008 Page 18 Mr. Cann provided his perspective on use of the tax exempt bond tool; determina- tions of rents based on median income that are far above average rents in the City of Roseville; and opined that the only thing the City received from this agreement was keeping rents below 60% of median income, which he further opined was es- sentiallymeaningless. Councilmember Roe sought documentation on which to base Mr. Cann's asser- tions. Mr. Cann reviewed 2008 median rents for a two bedroom unit estimated at $1,092; with third quarter 2007 average two bedroom rents in Roseville at $980. Mr. Cann noted that the rents being charged at Centennial were considerably less; but opined that the 60% limit wasn't much of a limit, and further opined that the City should have imposed much more stringent limits; and asserted that the City Council didn't perform due process before authorizing this bond issue. Councilmember Roe questioned whether the City Council had the authority to in- voke more stringent limits. Mr. Cann responded affirmatively, and offered a variety of ways that this could have been accomplished: lower percentages of median income; future rent nego- tiations; and by permitting increases based on cost index figures. Councilmember Pust reviewed current rents; with a 25% increase the first year, and cost of living adjustments (COLA) thereafter based on consumer price in- dexes; or a percentage increase in median income in the metropolitan area; or some other inflation device, but not based on federal income as an only option. Mr. Cann addressed another question: that state law imposes additional require- ments beyond federal requirements, that 20% of the units be rented at no more than fair market rent, determined by the Department of Housing and Urban De- velopment (HUD) annually; theoretically in the 40 - SOa' percentile rent in the metropolitan area; and opining that those appeared to him to be slightly less than the lowest rents owners were proposing in their tax credit application, making him question whether they were meeting state requirements, and suggesting that this was a question that the City Council was authorized to question. Mayor Klausing opined that if it was a state regulation, and that with few excep- tions, there was usually a state agency empowered to impose that, and questioned if the MHFA didn't have the ability to oversee the requirements. Mr. Cann advised that it was his understanding that the MHFA monitored com- pliance with tax credits; but that no state agency was officially authorized to monitor tax exempt bond requirements.