Meeting Date: July 27, 2021
To: Members of the Housing & Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Title
Housing & Redevelopment Authority 2022 Budget
Body
Action Requested:
The HRA to review and adopt the preliminary budget for 2022 with clarifications.
Summary Report:
Each year the HRA adopts a budget for the following year. The HRA’s main source of revenue comes from ad valorum taxes. The HRA also receives income from rentals, interest and other miscellaneous sources.
The proposed budget includes estimated expenditures for 2022.
ANALYSIS
2022 General Operating Budget
Revenues
• There is a projected 4.5% increase in overall revenue for 2022. Ad valorum tax revenue is estimated to be $290,723, with other revenue projected at $80,050. This other revenue includes interest from investments (this number is provided by the Finance Department), income from rental properties and refunds and reimbursements.
• Revenue from rents have been calculated without vacancies- HRA has not had a unit vacancy since 2017. Rents should be reevaluated in the future to bring rent revenue in line with HUD’s FMR for Rice County.
Personal Services
• Salaries, overtime, longevity, part-time, PERA, FICA, MED/Dental, Workman’s Comp, etc. These budget items are set by the Finance Department.
Supplies - No change
Charges for Service
Professional Services
• The Professional Services budget item has been decreased to $10,000. Due to HRA initially sponsoring the rental license and policy modifications, along with a housing study, the original budgeted amount of $25,000 was expanded to $61,791 through HRA Resolutions.
Auditing/Accounting
• The Auditing/Accounting budget is set by the City of Northfield Finance Department
Legal Services
• Decrease from $22,000 to $10,000. 2021 saw an inordinate amount of legal activity stemming from land conveyance/sale of property, forgivable loan, updating legal forms, etc.
IT Equipment Replacement
• The IT Equipment Replacement budget is set by the City of Northfield Finance Department in conjunction with IT Department
Mileage/Meals/Lodging
• The purpose of Mileage/Meals/Lodging is to cover costs for HRA board members and/or staff to attend conferences and training. Staff proposes an increase to this item now that in-person trainings and conferences can occur
Training/Conference
• The purpose of this budget item is to cover the costs for HRA board members and/or staff to attend conferences and training. Staff proposes an increase to this item now that in-person trainings and conferences can occur
Advertising
• Decrease from $2,000 to $600, this is to cover HRA’s required public notices for hearings
General Insurance
• The purpose of this budget item is to cover the HRA’s proportional share of the City of Northfield’s General Insurance. This budget item is set by the City of Northfield Finance Department. No Change
Other Charges
Dues/Memberships
• HRA is currently an active member of the Minnesota chapter of the National Association of Housing and Redevelopment Officials (NAHRO) and staff is exploring other membership opportunities
Misc. Operating Expenses
• No change
Administrative Charges
• Administrative charges are set by the City of Northfield Finance Department and has been estimated at $8,188, a 4% increase from the prior year
Rental Properties/Programs
General Insurance
• Insurance for HRA owned rental properties has increased to $3,380
Water/Sewer/Gas/Electricity
• This budget item is to cover the utility costs for HRA owned properties. Staff proposes no change at this time and notes that a leaky toilet drove up water costs for a couple of months in 2020
Misc. Operating Expense- taxes, repairs, mowing/snow removal, association dues
• This budget item is to cover the taxes, repairs, association dues, mowing and snow removal, and future professional management costs for HRA owned properties. Staff proposes a decrease of approximately $8,668- these extra funds were included during the 2021 budget cycle for the repair and replacement costs of aging appliances in HRA owned rentals.
Charges for Service
Programs and Public Service- Low- Moderate Income Programs
• Staff is requesting to fund the following programs and public service projects:
o Northfield Union of Youth Wallflower Project $20,000
o HRA voiced support November 2020 to increase contribution to NUY to leverage funding for FT social worker
o Mobile Home Rehab Program $20,000
o Runs concurrently to CDBG Mobile Home Rehab Program for those ineligible due to citizenship status
o Fall Clean Up at Viking Terrace/Northfield Estates/Florellas *******
o Clarification- is this a temporary or permanent program?
o Other Improvements/Projects $116,161
o This is the unallocated fund balance with which HRA is left to contribute to additional programming- mobile home weatherization, additional funds to down payment program, rental stabilization, etc.
Water, Sewer & Storm Drainage
• Southbridge property fees- no change
• Misc. Operating- mowing at Southbridge- no change
Alternative Options:
The HRA may review the 2022 budget and propose changes or accept the preliminary budget as proposed- with clarifications.
Financial Impacts:
See attached
Tentative Timelines:
HRA Board is requested to approve the preliminary 2022 budget in July in order to provide accurate numbers to the City of Northfield Finance Department in August for Council to set maximum levy in September for final approval December.