The meeting commenced with a detailed presentation of the revised 2024 budget and the proposed 2025 budget by the executive director. The HRA’s mission to support residential and commercial area vitality, preserve property values, and meet diverse community housing and economic needs was highlighted. The executive director explained that the HRA’s funding fluctuates due to unpredictable private investments and other opportunities, leading to a budget that emphasizes expenditures over revenues.

For 2025, the budget forecasted a 42% increase in general administrative expenses, driven by property acquisitions and higher maintenance costs for HRA-owned properties. Notable projects such as Aster Commons and Penn Station are set to require approximately $1.2 million combined. Personnel costs are expected to rise by nearly 7%, influenced by a compensation and classification study and rising insurance costs.

In terms of revenue, the executive director noted a decrease in expected funds from the new 0.25% Metro sales tax for affordable housing, which dropped from an initial projection of $453,000 to approximately $230,000 for 2024. This reduction was attributed to the partial collection of the sales tax during its first year. The discussion touched on whether personnel costs could be shifted between the city and HRA budgets, with the executive director confirming that city policy dictates these allocations.

A historical overview of levy amounts revealed that the HRA has not maximized its levy despite new funding sources. For 2025, a proposed 3% levy increase would impact homeowners by approximately $1.38 annually. This increase is aimed at addressing the administrative funding gap, as significant program funding often lacks corresponding administrative support.

The budget presentation also included achievements from 2024, such as the successful administration of the housing choice voucher program, recognized by HUD for exceptional management, and the continued success of the first-time homebuyer program, which issued 11 loans by mid-year.

Further discussion highlighted the provision of additional loans for housing initiatives, though financial viability remains a challenge, prompting considerations for additional assistance from previously identified spending plan dollars. The HRA is evaluating current housing programs and proposing changes to the down payment assistance program to address housing needs. The acquisition of properties on Penn Avenue and along Interstate 494, the latter through donation, was noted as potential redevelopment sites.

Questions arose regarding the Section 8 program’s financial management and reimbursement processes. Historically, administration costs sometimes exceeded federal reimbursements, but recent improvements in HUD reimbursements have been noted. Optimism remains that additional administrative funds from HUD may eliminate the need to draw from the general fund to cover expenses.

Ongoing work at Aster Commons and the Lindale Gardens site, along with training initiatives for staff to adapt to new regulations, was also discussed. The budget for reduced interest rate fix-up loans has been updated to include funding for additional loans due to rising interest rates, with a proposed increase from $25,000 to $40,000 in 2025.

The HRA continues to support approximately 325 households through its Section 8 and Kids at Home programs. Concerns were raised about the fund balance, which hovers around $3 million. The conservative historical approach has allowed for significant fund balances, providing opportunities for new projects. However, financial strategies may evolve to be more aggressive depending on circumstances.

Attention shifted to the upcoming decertification of Tax Increment Financing (TIF) districts and its implications for funding and staffing. While concerns about administrative fund shortages due to larger TIF district decertifications were noted, newer TIF districts are generating more income than initially projected, potentially alleviating some funding challenges.

The consent calendar included a single item regarding the approval of revisions to first-time homebuyer program guidelines. The HRA also considered a resolution for the proposed 2025 budget and tax levy, which includes a 3% increase resulting in an approximate annual impact of $38 on the average homeowner in Richfield. The proposed levy sets a maximum amount, with the option to lower it in the coming months. A motion to approve the proposed budget was made and seconded.

During the executive director’s report, the new city clerk, Michelle Friedrich, was introduced and welcomed by members. The meeting also discussed the possibility of a Redevelopment tour, scheduled for October 5th, with members encouraged to participate.