City Council Meeting Date: April 7, 2026
To: Mayor and Members of Council
From: Ben Martig, City Administrator
Scott Wopata, Community Development Director
Brenda Angelstad, Finance Director
Melissa Hanson, Housing Coordinator
Title
Consider Resolution Approving the Transfer of Funds from the Housing and Redevelopment Authority to the Housing Trust Fund Related to Meet Matching Requirements of the State of Minnesota Local Housing Trust Fund Grant.
Body
Action Requested:
The Northfield City Council approves Resolution Approving the Transfer of Funds from the Housing and Redevelopment Authority to the Housing Trust Fund Related to Meet Matching Requirements of the State of Minnesota Local Housing Trust Fund Grant.
Summary Report:
City staff is requesting Council consideration of a resolution authorizing the transfer of $161,500 from HRA Fund 295 (General HRA Fund) to HRA Fund 296 (Local Housing Trust Fund) to satisfy the local match requirement associated with the State of Minnesota Local Housing Trust Fund Grant Program.
In 2025, the City of Northfield was awarded $150,000 through the State’s competitive Local Housing Trust Fund Grant Program. Northfield was one of 36 communities selected for funding out of 54 applications statewide, with total requests exceeding $9.6 million. The award reflects a competitive review process and recognition of the City’s commitment to advancing local housing initiatives. Staff have recently received the grant agreement and are working to process that as a future agenda item.
As a condition of the grant, the City is required to provide a dollar-for-dollar local match of $150,000. The application approved by Council for submission included $161,500 as matching funds. Staff recommends satisfying this requirement through a transfer from HRA Fund 295 General HRA Fund to HRA Fund 296 Housing Trust Fund. This transfer meets the State’s eligible match requirements and ensures compliance with the grant agreement while preserving the intended structure and integrity of the Housing Trust Fund.
In conformance with City Ordinance, the City Council (rather than HRA) holds the authority to authorize funds into the Housing Trust Fund.
Local Housing Trust Fund - Background
The City of Northfield established a Housing Trust Fund in 2022. A Local Housing Trust Fund (LHTF) is a dedicated public fund established by a city, county, or housing authority to support the creation, preservation, and rehabilitation of affordable housing. In Minnesota, cities are authorized under state statute to create local housing trust funds and may capitalize them through local revenue sources such as general fund transfers, development fees, donations, program income, or other designated revenues. Funds are restricted for housing purposes consistent with adopted local policy and applicable statutory income requirements.
An LHTF functions as a flexible financing tool that can provide gap financing for affordable housing development, rehabilitation assistance, down payment support, rental assistance, land acquisition, infrastructure necessary to support affordable housing, or other locally defined housing initiatives. Unlike one-time grant programs, a local housing trust fund is intended to be an ongoing funding mechanism that allows a community to accumulate and deploy resources strategically over time in alignment with its housing goals.
Establishing and maintaining a Local Housing Trust Fund signals a long-term municipal commitment to housing affordability and provides a framework for leveraging additional state, federal, and private funding opportunities that may require or prioritize locally committed matching dollars.
City Plans & Policies Relevance:
Not applicable.
Alternative Options:
None recommended.
Financial Impacts:
The transfer authorizes $161,500 from HRA Fund 295 to HRA Fund 296.
Tentative Timelines:
The budget amendment will be processed following Council approval.