HRA Agenda 01-04-1984MINUTES
Monticello Housing 6 Redevelopment Authority
Wednesday, December 7, 1983 - 7:00 P.M.
The regularly scheduled meeting of the Monticello Housing and
Redevelopment Authority was duly hold at 7:00 p.m. on Wednesday,
December 7, 1983, in the City Hall Conference Room. Members
present were: Chairman Dr. Philip White, Vic Vokaty, Don
Cochran, Bud Schrupp, and Jack Reeve. Staff Present: Tom
Eidem, City Administrator, and Allen Pelvit, Director of
Economic Development.
Chairman White called the meeting to order. White also asked for
a motion to approve the minutes of the October 5, 1983, meeting.
Motion was made by Bud Schrupp and seconded by Don Cochran. Approved.
3. Consideration of Entering a Joint Power Agreement for Tax Exempt
Mortqaqe Bond Financing.
This item was informational and needed no action to be taken.
Congress will most likely kill any chance of tax exempt mortgage
bond financing for 1984. Jack Reeve made a motion to drop this
from the agenda. Bud Schrupp seconded, and it passed unanimously.
4. Fulfillment Systems, Inc. - Urban Development Action Grant Progreso.
Eidem reported receiving a formal letter from Secretary Pierce of
the U.S. Department of Housing and Urban Development. They are
holding over our application for FBI's UDAG funds until January, 1984.
This in no wayguarantees its
gua approval. It only allows the application
to be re-ontered into the funding cycle. Eidem recapped the FSI land
transaction whereby the Authority can buy Lots 6, 7, c 8, Lauring
Hillside Terrace (valued at 8130,000) and sell to FSI for $27,000.
Eidem further explained the distribution of monies for the project.
Industrial Revenue Bonds in the form of a tax exempt mortgage along
with tax increment financing, UDAG funds, and private contributions
are combined to total approximately $850,000. FSI's piano are to
begin construction in April with a move in July. This might mean
some special HRA meetings in February and March because of waitiny
for the UDAG decision. Chairman White asked what would happen if
the UDAG is disapproved. Eidem explained that FSI has facilities
available in Wisconsin and would move. The utaff has contacted the
Minnesota Department of Energy, Planning and Economic Development
office to seek aid should the UDAG be turned down. Mother alternative
may bo Community Dovelopmont Block Grants.
5. Consideration of Authority Pursuing other Directions.
Eidom explained that Allen Polvit'a duties were, approximately 50♦
City related at this time. He also stated that as time progresses
Polvit's responsibilities with the HRA will increase, thus, enabling
the HRA to pursue other areas. It was suggested that because of the
housing shortage, the Authority should take an aggressor role in
housing starts. The Shurco III Project has virtually secured all
rental housing available in and around Monticello. It was the
consensus of the Authority to becumo more proactive than reactive
HRA Minutes - 12/7/83
in searching for developers to address the HRH's needs. Don
Cochran expressed fears of getting caught up in the housing game
when we could be safely pursuing industrial projects. Fidem
suggested using "But for this funding the project would not..."
clauses to help strengthen the program.
Other areas to be considered were killing the Poehler Project and
having the Authority build and own the Senior complex. It was
the consensus of the Authority to allow private developers to
complete the project and only get involved as a last resort. HRA's
may be involved in fuel assistance programs, etc.
Another area to strongly become involved in is considering a tax
increment district that would include properties for the First
National Bank, Security Federal, Wrightco, and National Bushing.
It was suggested this might help with the library expansion and
redeveloping the area near Wrightco. It has also been suggested
to Jim Ridgeway that the Authority buy Wrightco out and relocate
them into the Industrial Park. These are projects that can be
completed in the proposed districts 25 year life.
Chairman White admitted he was against a tax levy of up to 1 mill
in the past. However, he now feels the Authority needs funds
during the next few years to help survive. One mill would give
the Authority approximately $58,000 if levied against the entire
city and not just the tax increment empowering district.
Jack Weave expressed possible bad public comments about this tax
increment district. Bidem stated that activity will definitely
have to take place. They could improve streets, improve buildings
appearances (Jones Siding). The County, School District, etc.,
may have to forogo the taxes on one or two businessea but eventually
will share in the increased taxes of 10 or more businesses. Public
comment will have to be dealt with positively.
Don Cochran suggested that the Authority moot with the Council to
diocuus the mill levy. He also suggested Dr. White attend thin mooting
to help explain why he changed his stand on the mill levy. Dr. white
agreed to attend if given sufficient notice and hold on a Thursday
morning. It was the consensus of the Authority to have this meeting
after January 1, 1986, possibly at Perkins or the Silver Fox. Don
Cochran and Dr. white preferred the Silver Fox because of the
opportunity for privacy. Bud Schrupp suggeotod ¢idem out up the
meeting with the Council.
G. Connidoration of Submittinq a Lint of Narron for Dr. White'n Replacement.
Chairman White gave his resignation and also asked Jack Reeve if
he would accept another 5 -year L, -,a. Reeve declined anothor term
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HRA Minutes - 12/7/83
because his job would not allow him to give the Authority the time
and dedication required. He expressed his enjoyment working with
the Authority and said he would like to help with future City
business.
As a result of Dr. White's resignation and Jack Reeve not accepting
another term, two vacancies will exist for the Mayor to fill. The
following names were suggested as possible appointees:
Gary Wieber Cecile Muehlbauer
Jerome Baeyon Harvy Kendall
Fran Fair
After some discussion, it was the Authority's consensus that Cecile
Muehlbauer may have a conflict of interest with certain land deals
the Authority may want to enter. It was thought that a city
government (elected official) would give credibility to the HRA
with regard to tax levy. This will be discussed with the Council.
Because only five names were submitted, Dr. White suggested asking
Council their feelings on advertising for applicants.
7. Consideration of Assuminq Mortqaqc.
Chairman White questioned the payment to bank. Eidem explained
that the bank is willing to continue holding the paper with interest
($2,200) paid every six months. Poehler's option expired in November,
1983. Either Poehlor'e Project commences in the spring of 1984 or we
find a now developer. Eidcm wont on to explain that property was
initially purchased for $45,000 and at present would require $52,000
to rocoupo Authority's money. The longer we hold it, the harder it
becomes to make the project work. Motion by Bud Schrupp to aeaumc
the mortgage, seconded by Don Cochran. Passed unanimously.
B. Consideration of Reviewing the Procedural Rules Governinq HRA Business.
Chairman White commented on how well the Authority has conducted
business during the last 12 months. He asked if there were any
changes to be made with regard to rules cot on February 9, 1983.
Consensus was to carry on with existing rules.
9. Consideration of Adontinq a Resolution for Fntorinq into a Plcdqo
Agroemont.
Jack Reeve made a motion to enter a Pledge Agreement for Tax Increment
District 02 (Metcalf & Larson). It was seconded by Don Cochran, and
passed unanimously. See Resolution 1983-5.
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[IRA Minutes - 12/7/83
10. Informational Item - Possible New Business. J
Eidem explained how Pelvit has been working with Key Tool and
Plastics in an effort to relocate their business in Monticello.
He reported that Key Tool and Plastics Company officials have
asked the City to initiate a preliminary approval for Industrial
Revenue Bonds prior to January 1, 1984. The Council will hold
a special meeting on the 27th of December where appropriate toning
will also be looked at.
There being no further business, the meeting was adjourned.
D
Allen L. Pelvit
Director of Economic Development
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HBA Agenda - 1/4/84
AGENDA SUPPLEMENT
3. Further Discussion of Possible Nominees for Open HRA Terms. (A.P.)
A. REFERENCE AND BACKGROUND:
Chairman White gave his resignation at the December 7, 1983, meeting.
Jack Reeve also stated that he could not accept another five-year
term. As a result of these resignations, two vacancies need to be
filled by the Mayor. At the December 7, 1983, meeting, the following
names were submitted as possible nominees for HRA appointments:
Gary Wieber Cecile Meuhlbauer
Jerome Baeyen Harvy Kondell
Fran Fair
B. ALTERNATIVE ACTIONS:
1. Contact the above individuals inquiring about their interests
in the HRA and submit nominations to the Mayor.
2. Have HRA members submit more names as nominees for HRA.
3. Advertise in the newspaper for persons interested in working
( with the HRA, contact the individuals, and finally, submit
names to the Mayor.
C. STAFF RECOMMENDATION:
The staff roccmmends the Authority submit more names they fool would
be both qualified and fool comfortable working with the HRA. We
would like to have the nominations submitted to the Mayor by the
January 23, 1984, Council meeting.
D. SUPPORTING DATA:
Data supporting the namoa suggested aro in your December 7, 1983,
minutes - Item 16, Consideration of submitting a list of name for
or. white's replacement.
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HRA Agenda - 1/4/84
4. Consideration of Participating in the Minnesota Small Cities
Development Program. (A.P.)
A. REFERENCE AND BACKGROUND:
At the December 7, 1983, meeting,the Authority's consensus was to
look into the possibility of Community Development Block Grant
Furls (CDBG). The program's name has been changed to the Minnesota
Small Cities Development Program (SCOP).
The following is a brief description of the program and some of its
eligible projects;
The purpose of the SCDP is to help Minnesota communities become more
healthy, stable, and desirable places to live and work. It is a
community development program first and foremost. It is not a
housing rehab program, a public works program, nor a business assistance
program. It is designed to improve communities by directing project
benefits to low and moderate income residents making it possible for
them to achieve community standards. The purpose is based on federal
law. The Federal CDBG Program has the following objectivest "Development
of viable urban communities by providing decent housing and suitable
living environment and expanding economic opportunities, principally
for persona of low and moderato income."
Some eligible projects includor
- Housing projects designed to increase the supply or quality of
affordable dwellings suited to the occupancy of low and moderate
income individuals and families. This includes improvements to
existing housing stock as wall as construction of now housing
starts.
- Public facility projects designed to improve public buildings
on infrastructure serving a community.
- Economic development projects designed to create now employment
opportunities, maintain existing employment, or otherwise increase
economic activity in the community.
B. ALTERNATIVE ACTIONS
1. Not pursue any other directions for the Authority at this time.
2. Become involved with the program, utilizing these funds as an
alternative oourco of funds for the projects above.
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HRA Agenda - 1/4/84
`1- C. STAFF RECOKMENDATIONt
Since this program is very similar to the UDAG Program (which we
may be ineligible for after February 29, 1984), it is recommended
that the Authority utilize this program to help obtain those
objectives stated earlier.
D. SUPPORTING DATAt
Copies of program descriptions eligibility and project design/grant
types are included for your familiarization with the program.
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Ned r
SECTION ONE Program Description
Funlingf ftheedocrulCommmunityDevelopmentBlockGramProgram(CDBG),hasboonestabl6tw•dasamwayofaddressing
the critical social, economic and environmental problems faced by communities acmes the country. The purpose and o bhj Oivn
of Minnmesoa's Snull Cities Development Program ISCDPI follow laws and regulations established by the state and fceral
government.
The purpouc of the SCDP program is to help Minnexna communities hecoon nwwc healthy, stable and desirable places to live
and work. It is a community development program first and foreman: it is not a housing rehab program• a public works pro.
gram, not a business um6taince program although h•nuy he used to address these community n oceds. It is designed to improsc
ctrtnmunames by directing project benefits to low and moderate income residents making it jxv sibte for them to uchieve commu-
nity stantards. The purpose is based on federal law which states: that the primary objective of the CDBG Program is thc: dot el.
nprnrnt ^ftiuldr urban cunmunitirs, 6v protiding dro rnt homsing and.tuituhle living rntinvnment and rmrytmling rrowomnr
,ggxonmmrt. prLu•ilwdh• fiorryratMs nffwt• and rmderare inromor
All Iunlcd wtivoies must suppool al team one of three mw fccleral objectives and canna henefit moderato income persons to
the a•sclusmnut hw income persons.
The three major objectives are:
a ikncta ht hmw and mnterme income persons (income which dims not exceed BO percent of the median for the arca).
• Prevemi000reliminaticonofstations and blight
• Aleviatiom tit urgent community devekmpmem needs caused by existing co oditiow which pow a wruw and immediate
threat no the health at welfare of de community where other fuurtcial nesouren are not available to meet those needs.
'rhe total amount of furls estimated for award in 1994 is approximately S213M.M. Swim Three. Illuaration I shows the
method to he used for distribution of thea avaitaMe funds,
U
I ' SECTION TWO Eligibility
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APPLICANT FLICIBILITY
Any general purpose unit of local government, including cities. counties, and ownships located in a rnonentitemem arca or
electing eaclu%ion from an urban county, is eligible to apply for arc gram on its behalf each funding cyck. Generally. all munici-
palities under 50.000 population may apply, as well as any counties or towns which do not receive funding through HUD's
Urban County F;ntdletncm Program may submit an application. St. Paul, Minneapolis, Bloomington. Duluth. Rochester. St.
Clywd and Moorhead are entitlement cities and therefore are not eligible. The urban counties of Hennepin and Anttks and thou
county municipalities receiving funds directly faun urban counties are also ineligible.
ON -BEI IAI.F-OF APPLICATIONS
Applications nuy be submitted by one eligible jurisdiction on-behalf-ofanother. On -behalf -of applicatimu may he designed to
jointly address thecommon problems of one or more jurisdiction (ea: a county may apply for housing rehab projects on -behalf -
of several townships.) In other cases, an eligible applicant may submit an application on-belialfof another where the Meal gov.
ernment may feel it lacks the administrative capacity to apply for and manage a local program.
I . An eligible applicant may nuke only ow application on its own behalf, or from which it would directly benefit.
2. An eligible county may submit an application for a countywide project and also submit one mr more qVicatiom on -behalf -
of other eligible cities or towns within is jurisdictions. However, communhies for which a county submits on their behalf
must be excluded from the countywide application.
J. On-"- lf-of upplicnnms must he approved by the governing body of each paniripam Thi% is done to a%vure nm%cnt and
full cooperation, and to avoid duplication and pas%ible miwnder%tannling.
SC'DP staff st rongly encourages el ignhle units of local government to apply for SCf )P Hinds on their own. The pmccas is simpler.
Application preparation m%isunce is available from the regional development commis%inn of other technical assistance orgam-
•ation%. Project administrwhm services nuy dso he crnmracted. Fra mune inf umut i,m about these alternatives contact the Com-
munity Development Representative for your area.
1) LW11ALIFICATION OF APPLICANTS
All eligible applicants are generally considered w have capacity to undertake Small Cities Development grants prnjeas. Ihw-
ever, applicants will be disqualified when the fallowing conditions %et forth in 10 MCAR 1 1.310C c%ia:
• therearerruslanndmgaudit ftndingsabrmthe graMnhaw nollsolsfMYorgyattempted toarmlQ,the Jfuafion.
• project%ha%epassed scheduled close-wtand tAegntueeit~ytocompkletbrpri*oInaaerproff/ovamannerIsIn
• the applicant has not made scheduled progren on s previously mp"td project and Wr #ram4wY MMy to complete fbe
prq*1 /n as exprdllbus maaaa b in guts".
I I year hcbrve that yreur cumnnanity's applkatinn may he disytalifled for the rcaxms indicated, you should all the Comonsuaity
Develtpacm Represenative for your area prior to aanpletin$ an application for this program.
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(r I SECTION THREE Project Design and Grant Types
PROJECT CATEf it )RIES
Conimuphics may apply for SCDP funds to undertake activities that arc bradly avMgurimcd according to the type of aced Gr the
project. Clnununhy DcvckVnwrd prn*b namt be designed as addressdcficicr les in: 1) iawsirg. 2) public facilities, and/or
1I economic lcvchgrment. Prn*4" may consist of aw tw more retued aotiviilcs within a category or to a lesser degree among
.,mcgla ies because there i% mine o%crtap.
• Hauvinp Pot nos should be designed to increase the supply rrquulity of affordable dwellings suited to the occupancy of
fi- and nddkrate income individuals and Tamil ics, including improvemems to the existing bmaing stock as well &mudvi-
iksd,,%igni,dw lilcil irate construct an of law housing units.
Sli the activities gcrwrally a.slviated with housing projects include: real rnipeny acqui%ition, code cnfnncncm,
rehahilhatin, historic 1we%enatin. energy vvm%cmitirn• clearance, dcmdhiom, andhr froVIval of buildings and relnea•
tem. rehab Id puhliclyrsvned or acquired p'gxrly fur resale in the Provision of a,%i%tcd housing; rehab futawing and the
tenonal cit wchucntural Iwrriers ser other housing assi%tara•c activities low rhe physically or "winallydi\abled
• Public f1wilirim PntJt"V stwetld he designed al improve puhli• huiWing%or infrastrw•turc serving a oeighhonhnd or a
carnunny Projects in supra n of public services are glut included In this category.
&mw wf stn eligible activilics under this category inclwlc water and sewer facilities, (Including chum wi m.l milid wane
disryn.l facilities• street impriti c mems, property acquisition for public facilities; rwnresidcmial senior rr handicapped
amen• and ocighhrhrd facilities providing community service%to residents of a target aro.
N fl•li: Public scn via Klivitin, including that cosdrrnnd with stslpkymem, crime prewmtion, child cam• health, drug
abuse. education, energy conservation, welfare or recreational nods most tie directed toward coordiniming public and pri•
vale devekpmem programs. In order to quslifykw funding under Ilse SCDP Program, public services treat:
• he provided for residems Warm in which other SCM-fiandrilphy" development setiviiiin am being 2 loc.Iemedia
a coordinated manner.
• SCDP funded activities tiny tardy be done incidentally for persons art apart (d the target area.
• Inc apgro;wiatc and chher o new service or a q umiflalde iacrem in the carrem level of tervice:
• clnrprrsc a) Moore 111131" ID percent ,(the grain
• hvranlirlMelspnwn(lhrljr ls%b aWhedesignMtncrewenewempkrymcmlq+pmtuMin.maintainexistingengloy
owns, or Iahera iw hwiva%c ectwdwniv activhy in the ctnrmmity which will result in da impnmment orthe co m irwhy't
1111•lall e� IddMlld• \Ituatdn.
I:Irpohle aitivuws that fall whhin the econ rine devcklpurcm catepnlry irwhWe land mequishioa, public failhiea and taher
unpro%cnwm% in support of mom mitic d nctnpmem (mach as water and seer lines, access Itad%): and acquisition. circ
stna•tdn, mhabilotatdn, ow Imtaltatinofcomnercral amt induurial Wihties aid employee training.
0
l
;7
6
inaddkkm.,furkh,mayhewbsraanKtedIt, aprivate. nim pmfdorganiutknwviiuiLIX'tltialdcvckTOM uvryaatiimt
twS81C(SnullBusiu_, lnvcstmcntCtmatinec):Suclifmdsmaybe uscdfixnth weligibleativiiies.a(or the G0l4
ing sp.vific typos �tf aoivhk-:
a) loans, grams. guaramees.,imcresi supplements: or technical"stamv to new.Kexiting wall huinc%%c.. mirAirity
businesses and neighburho d nonprofh businesses.
Amismnce'may'beused for:
I I capiudifor land. Structures. property. impmvemems and faturcs;and
2) working capital nu operatkwi funds (although this type of assistatre is mn envuraged).
hi capitaliiationofaSBICDrkscaldevelopmemempix ion required toywfify(hr assistanceunder other:icderal,pro•
grams..and
C) on6t& ee to minority contractors taobuin pe Amnaree bondatg.
Other activities may be eligible. but require an elijibility determination by, the Department, Since other WWI laws and
regulaafansoftenapply. eligible applieataaarearSWtoeom o�coiu"tyde¢vvapmem«presemmiveintheDcpannwm.
befam preparing ani application on the types of aetivhin daetibed above.
COMPONENTS OP A ROJECT
A prejeei is undertaken to bnprove conditions testtuing hart etre of threeepegrnfea of Cited: hwslnS. publicfueilities: or eco -
name develep vein. The project,ttny consist of one or more ativitks, each of which may rewire eme'or arae task. Tanks are
the steps nec4sary e
to suecel-Adly eomplto an activity. Tasks rosy be done is sewetnce a in Yndem and the level of deuil will
depend an dere type of activity. howevercompliance nreas as well as "atattagement" for activide; may, be considcrM tasks.
The followbyexampleuInt eitdcAtoshowdie relationship ofthecomponents ofsproject.Acomprehansiveprogram.consist•
in$ ofat kap 2 projects: would be more detailed.
Cuyt lea NOWT 4 Project
ActivBin
Tyska
Activity I1
Select Reelpiems
Ime eta Reduction
Advertise
QUW4 Pn¢ny
— Prepare WV,%
61, OwnerOccupams,
Pntgrsm
Certify,Applicams
chnxfivns
Adlvuy"12
AcrluisilkvMpemolilion
klemify
Appraise Pr peny
Nt gotiWe sults — chnc
Rekwafion,S Properties
Structures
4r=mcm
Nuaily
Residemy.
Secure replacement
Niusiag
AtOV4,#3
Review,
Anip Project
HmabliA
GeneralAdmiAimratim
Pnrgrant
andvotnplianre
timelines
Design
reaponsibilllks
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HRA Agenda - 1/4/84
S. Consideration of Using Tax Increment Financing in Conjunction
with Erecting a Speculative Buildinq. (A.P.)
A. REFERENCE AND BACKGROUND:
During the last few years Monticello has tried to erect a speculative
building but with little success. Most developers were reluctant
to take the risks associated with this type of investment. Reasons
for this were blamed on a sagging economy.
Now the economy is on the upswing, and I have located a developer
wishing to invest in a speculative building. The company is Veit
Construction, Rogers, MN. Their proposal is to construct a "Cando"
style facility with either leasing or buying the property from
Veit's. Veit's would like to use tax increment financing as an
incentive. This would help take the risk out of not leasing/selling
all units.
Veit's are presently doing some preliminary plane for the project.
I am also working with them in locating available parcels of land
and prospective tenants.
B. ALTERNATIVE ACTIONS:
1. Not working with Veit's by disallowing the possibility of
tax increment financing.
2. Pursue tax increment financing for a "Condo" typo speculative
building.
C. STAFF RECOMMENDATION:
This is a good chance to bocomo more competitive in economic development,
ospecially in attracting buoinossos who want to move fast. We recommend
looking into tho possibility of using tax incromont financing and/or
other forms of financing to help developers with a spec building.
D. SUPPORTING DATA:
None noodod at this point.
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HRA Agenda - 1/4/84
6. Urban Development Action Grant Eliqibility Renewed. (A. P.)
A. REFERENCE AND BACKGROUND:
As of August 1, 1983, Monticello was taken off the list of distressed
small cities. This made Monticello ineligible for UDAG
funding beyond that date.
Because of legislature during 1983, we are now again eligible
to apply for UDAG funds. This will be temporary because the
standards for distressed cities will be revised, thus, making
Monticello ineligible in the future.
B. ALTERNATIVE ACTIONS:
No action need be taken. This is informational.
C. STAFF RECOMMENDATION:
Although there is a considerable amount of work involved in a UDAG
application, we would like to take advantage of this opportunity.
If you know of a firm that may be thinking of expanding or relocating
but cannot proceed without additional financing, please have them
contact A. Pelvit or T. Eidem at City Hall.
D. SUPPORTING DATA:
A copy of HUD's notification of UDAG eligibility.
=W
w •, a� U.S. Depanmsnt of Housing and Urban Devebpment
Minneapolis St. Paul Area Office. Region V
220 Second Street South
Br'
• xlge Place Balding
Minnsapces. Mevtesaa SSW 1
OFC 2 ` 683
Honorable Arve Grimsmo
Mayor of Monticello
250 East Braodway, P.O. Box 83A
Monticello, MN 55362
Dear Mayor Grimsmo:
SUBJECT: Urban Development Action Grant (UDAG) Program
The recently enacted Housing and Urban - Rural Recovery Act of 1983
affects a number of small cities in their eligibility to participate in the
Urban Development Action Grant Program. Section 119(B)(1) of the legislation
grandfathers in any small city that was UDAG eligible for Fiscal Year 1983
and lost eligibility based on the March 1, 1983, Federal Register listing.
The Act provides that these cities continue to be eligible until the Secre-
tary of HUD revises the standards to include the extent of unemployment,
job lag, or labor surplus as standards of distreso.
This means that your community is aqain eliqiblo to submit a UDAG
application, providing you have mot the requiremonts of Section 570.453
concerning demonstrated results in housing and equal opportunity in housing
and unemployment. The next closing date for small cities applications is
February 29, 1984. You will continue to be eligible through the quarter in
Which HUD implements the new standards. We will keep you informed of those
proposed changes.
Should you have any questions, please feel free to contact the Oommunity
Planning and Development Division of thio office at (612) 349-3022.
Sincerely,
Thomas T. Poonoy
Manager, 8
C