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HRA Meeting Minutes – Monday, October 20, 2009 Page 5 Mr. Trudgeon advised that Ms. Kelsey would present a draft HIA Policy (Attachment A) for preliminary comment by the HRA, and as another tool available for the HRA. Mr. Trudgeon noted that the policy criteria, as detailed in the Request for HRA Action dated October 20, 2009, was based on the City’s first experience using the HIA and the City Council’s desire for future use. Mr. Trudgeon, by way of introduction, advised that staff had formulated that experience, information from other cities use of HIA’s, best practices, and many of the specifics of the City of St. Louis Park based on their favorable experiences. Ms. Kelsey concurred that a major amount of the criteria in the proposed policy was based on the policy in use by the City of St. Louis Park with modifications based on the City of Roseville’s experience in the community and outcome of the first HIA used. Ms. Kelsey noted the need to continually review the procedure based how to best structure the loan; involvement between the City and future homeowners associations for accountability and documentation; and a final process based on State Statute, allowing for little deviation and providing the most assurance for the City, and ultimately those affected homeowners. Ms. Kelsey reviewed the HIA Policy details, as listed in the report, highlighting the term of the HIA for fifteen (15) years of less as per current City practice; and staff’s recommendation that any future homeowner petition require at least 51% of the owners within the Association making the request to create an HIA; Ms. Kelsey addressed 2009 state legislation revising the division of fees to individual unit owners for any proposed improvement, some of which was prompted based on outcomes in Roseville for Westwood Village II. Ms. Kelsey advised that St. Louis Park and Hopkins didn’t look at the square footage or value of the parcel in determining the divisions of costs, but followed the association’s by-laws and declarations, with the City Council determining if an alternative basis is more fair and reasonable. Ms. Kelsey advised that staff was recommending that the HRA’s involvement would be staff time, housing value consideration, type of finances available that the HRA could fund versus more extensive bonding; other financing available in the community to assist in projects of this nature. Ms. Kelsey advised that the City Council could assign the HRA as the implementing agency at their discretion to close out funds if there was insufficient revenue. Ms. Kelsey reviewed the experience with Westwood Village II in experiencing 75% of the assessments paid, much reducing the required bonding. Ms. Kelsey further noted staff’s recommendation that the City assess 2%, rather than 1.5% of the total project amount to cover the City’s administrative costs, which was more realistic based on actual time based on actual cost calculations determined by the City’s Finance Department as it processed the first HIA for Westwood Village II in covering not only financial planner costs, but also soft costs. Ms. Kelsey advised that staff also recommended that the Policy provide for a Development Agreement between the City and Association, outlining the City’s expectations, terms, and guarantee of repayment; with the title involved in how draws would be processed with an outside agency monitoring the agreement to ensure no liens occurred on the project. Member Pust, on behalf of the City Council, expressed appreciation to staff for their extensive work on this Policy, noting the need for guidelines to be in place to avoid the many issues experienced with the first HIA issue. Discussion among members and staff included the prepayment of 75% of the homeowners, with 25% unable to obtain other financing, and impacting the entire project; and whether other market-place financing could have been an option; group ownership considerations. Member Pust requested language revision to the draft HIA Policy (Attachment A) specific to page 3, Section 4.j, changing “may” to “shall;” with additional discussion related to the five