12-15-2020 CDA Regular Meeting Board Packet

Board of Commissioners Packet December 15, 2020 3:30 p.m. - Regular Meeting CDA Office, 1228 Town Centre Drive, Eagan

- 1 - BOARD MEETING December 15, 2020 – 3:30 p.m. Dakota County CDA, 1228 Town Centre Drive, Eagan, MN 55123

If you wish to speak to an agenda item, please notify the Clerk to the Board via email at [email protected]. Emails must be received by 12 p.m. on Tuesday, December 15, 2020. Instructions on how to participate will be sent to anyone interested.

AGENDA PAGE#

1. ROLL CALL A. Audience Anyone in the audience wishing to address the CDA Board on an item not on the agenda or an item on the consent agenda may come forward at this time. Anyone wishing to address the Board who cannot attend the meeting in person may notify the Clerk to the Board and instructions will be given to participate during the meeting. Comments are limited to five minutes. Comments can be sent prior to the meeting to [email protected].

2. APPROVAL OF AGENDA AND MEETING MINUTES  November 17, 2020 Board Meeting Minutes 2

3. FEDERAL PUBLIC HOUSING AND HOUSING CHOICE VOUCHER CONSENT A. Scheduling Of A Public Hearing To Receive Comments On The Revised 2020 Public Housing 23 Agency Five Year Plan And 2021 Annual Plan

B. Approval Of Amendments To The Housing Choice Voucher Administrative Plan 25

4. CONSENT AGENDA A. Approval Of Record Of Disbursements – November 2020 98

B. Authorization To Carryforward Unused 2020 Private Activity Bond Volume Cap 101

C. Scheduling Of A Public Hearing Regarding The Disposition Of Property In Rosemount 103

D. Adoption Of The 2021 CDA Merit Compensation Policy And Plan 107

E. Approval Of Amendments To The Lincoln Place Admissions And Continued Occupancy Policy 122

5. REGULAR AGENDA

A. Discussion Of CDA Board Officer Appointments For 2021 – Informational 127

B. Recognizing Commissioner Thomas A. Egan For Outstanding Service And Leadership To The 128 Dakota County Community Development Agency

C. Recognizing Commissioner Chris Gerlach For Outstanding Service And Leadership To The Dakota 130 County Community Development Agency

D. CDA COVID-19 Response And Executive Director’s Update – Informational 132

E. Closed Executive Session: Executive Director Annual Performance Evaluation 133 - 2 - 6. INFORMATION

A. CDA Investment Report – Fiscal Year Ending June 30, 2020 135

7. ADJOURNMENT

For more information, call 651-675-4432.

Dakota County CDA Board meeting agendas are available online at: http://www.dakotacda.org/board_of_commissioners.htm

Next CDA Board Meeting: January 19, 2021 Annual Meeting – 3:15 p.m.; Regular Meeting – 3:30 p.m. Dakota County CDA Boardroom, 1228 Town Centre Drive, Eagan, MN 55123

- 3 - CDA Board of Commissioners Regular Board Meeting November 17, 2020

Dakota County CDA, 1228 Town Centre Drive, Eagan, MN 55123 (Via Zoom Conference Call)

Commissioner Gerlach called the meeting to order at 3:32 p.m.

COMMISSIONER ROLL CALL

Present Absent Commissioner Slavik, District 1 X Commissioner Gaylord, District 2 X Commissioner Egan, District 3 X Commissioner Atkins, District 4 X Commissioner Workman, District 5 X Commissioner Holberg, District 6 X Commissioner Gerlach, District 7 X Commissioner Cummings, At Large X

CDA staff in attendance: Tony Schertler, Executive Director Kari Gill, Deputy Executive Director Sara Swenson, Director of Administration and Communications Sarah Jacobson, Administrative Coordinator Lisa Alfson, Director of Community & Economic Development Maggie Dykes, Assistant Director of Community & Economic Development Kathy Kugel, Housing Finance Coordinator Ken Bauer, Director of Finance Lisa Hohenstein, Director of Housing Assistance Anna Judge, Director of Property Management

Others in attendance: Tom Donely, Dakota County Attorney’s Office Erin Stwora, Dakota County David Murphy, Bond Counsel, Kutak Rock Matt Hodges, Owner/Developer, Dominium

AUDIENCE

No audience members addressed the Board. Building open, but no one was in the audience to testify.

APPROVAL OF AGENDA

20-6335 Approval Of Agenda

BE IT RESOLVED, by the Dakota County Community Development Agency Board of Commissioners that the agenda for the November 17, 2020 Regular CDA Board meeting be approved as written.

BE IT FURTHER RESOLVED, by the Dakota County Community Development Agency Board of Commissioners that the minutes for the October 20, 2020 Regular Board meeting be approved as written

Motion: Commissioner Slavik Second: Commissioner Egan

Ayes: 8 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X - 4 - Atkins X Workman X Holberg X Gerlach X Cummings X

FEDERAL PUBLIC HOUSING AND HOUSING CHOICE VOUCHER AGENDA

Approval Of Amendments To The FYE June 30, 2021 Operating Budget (Public Housing And 20-6336 Section 8)

WHEREAS, the Dakota County CDA has previously adopted an operating budget for the fiscal Year Ended June 30, 2021; and

WHEREAS, on August 1, 2020 the CDA transferred 120 units of federally funded Public Housing to the DCCDA Section 18 LLC pursuant to Section 18 (Demolition/Disposition) of the U.S. Housing Act of 1937; and

WHEREAS, pursuant to this Section 18 transaction, the CDA received additional Section 8 funding to provide housing assistance for these 120 units; and

WHEREAS, an amendment to the operating budget is required to reflect the closing of the Section 18 transaction.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That the operating budget of the Public Housing program is hereby amended as follows for the Section 18 transaction:

Board Effective Net Net Res. # Date Description Revenue Expense Transfers Income 20-6269 7/1/2020 Original budget - - - - tbd 8/1/2020 Section 18 transaction 1,149,687 (1,149,687) - - Revised budget 1,149,687 (1,149,687) - -

Motion: Commissioner Cummings Second: Commissioner Holberg

Ayes: 8 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X Cummings X

CONSENT AGENDA

20-6337 Approval Of Record Of Disbursements – October 2020

BE IT RESOLVED, by the Dakota county Community Development Agency Board of Commissioners,

That the October 2020 Record of Disbursements is approved as written.

Approval Of Amendments To The FYE June 30, 2021 Operating Budget (Non-Public Housing And 20-6338 Section 8)

WHEREAS, the Dakota County CDA has previously adopted an operating budget for the Fiscal Year - 5 - Ended June 30, 2021; and

WHEREAS, pursuant to this Section 18 transaction, the CDA received additional Section 8 funding to provide housing assistance for these 120 units; and

WHEREAS, an amendment to the operating budget is required to reflect the closing of the Section 18 transaction.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That the operating budget of the DCCDA Section 18 LLC is hereby established as follows for the Section 18 transaction:

Board Effective Net Net Res. # Date Description Revenue Expense Transfers Income 20-6279 7/1/2020 Original budget 1,886,675 (2,297,842) 411,167 - tbd 8/1/2020 Section 18 transaction (1,149,687) 1,149,687 - - Revised budget 736,988 (1,148,155) 411,167 -

Establishment Of The Date For A Public Hearing Regarding The Disposition Of Property In 20-6339 Rosemount

WHEREAS, the Dakota County Community Development Agency (CDA) owns Cambrian Commons and the underlying property located in Rosemount, Minnesota; and

WHEREAS, the State of Minnesota has approached the Dakota County CDA to purchase 120 square feet to improve safety of sidewalk and upgrade the existing handicap ramp in order to meet current Americans with Disability Act standards; and

WHEREAs, Minnesota Statutes 469.029 Subd 3, by which the CDA may transfer by deed to local public bodies [of] those pieces of property which, in accordance with the redevelopment plan, are to be devoted to public uses, other than public housing or redevelopment purposes.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That:

1. A public hearing regarding the disposition of the approximate 120 square feet of Lot 1, Block 1 Cambrian Senior Housing a CDA property located on Robert Trail South at Lower 147th Street West in Rosemount will be held by the CDA on December 15, 2020 at or after 3:30 p.m. at the CDA’s office.

2. The Executive Director or his designee is hereby authorized and directed to cause notice of such public hearing in substantially the form attached hereto to be published in a newspaper of general circulation in Dakota County not less than twenty (20) days prior to such hearing.

Authorization To Execute First Amendment To Joint Powers Agreement And First Amended 20-6340 Subrecipient Agreement Between Dakota County Community Development Agency And Dakota County For Collaboration On Small Business Relief Grant Program

WHEREAS, the Coronavirus Ad, Relief, and Economic Security (CARES) Act was enacted on March 27, 2020, providing the State of Minnesota $1.87 billion of special supplemental funding, of which 45 percent may be distributed to local jurisdictions; and

WHEREAS, Dakota County received an allocation of $52 million in CARES Coronavirus Relief Funds (CRF) from the State of Minnesota that must meet the eligibility criteria established by the U.S. Department of the Treasury, which must be expended by December 1, 2020; and - 6 -

WHEREAS, the Dakota County Small Business Relief Grant Program (County Program) was established by the Dakota County Board of Commissioners (County Board) on July 14, 2020, per Resolution No. 20- 346, and funded with Dakota County’s allocation of CARES Act CRF; and

WHEREAS, County Board Resolution No. 20-346 also authorized the Dakota County Community Development Agency (CDA) implement the Program on behalf of Dakota County; and

WHEREAS, the Board authorized the County to enter into a joint powers agreement and subrecipient agreement with the CDA on August 25, 2020, per Resolution No. 20-413, establishing the terms of the partnership and the roles and responsibilities of the county and CDA to implement the county Program; and

WHEREAS, the Board authorized the expansion of the County Program to include 294 Dakota County businesses not funded by the Minnesota Department of Employment and Economic Development (DEED) Small Business Relief Grants Program nor other city funders on September 22, 2020, per Resolution No. 20-475; and

WHEREAS, Resolution No. 20-475 increased the County Program budget by $3 million to ensure sufficient funding to the increased applicant pool; and

WHEREAS, the County Attorney’s Office has drafted the first amendment to the joint powers agreement and the first amended subrecipient agreement between Dakota County and the CDA to reflect the increased program budget.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That the CDA Executive Director is authorized to execute the first amendment to the joint powers agreement and the first amended subrecipient agreement between the Dakota county Community Development Agency and Dakota county for collaboration on the Dakota County Small Business Relief Grant Program.

Authorization For Early Decertification of Tax Increment Financing District No. 10 (Redevelopment 20-6341 District) In The City Of West St. Paul And Termination of Contract For Private Development

WHEREAS, by Resolution 96-378 (June 18, 1996), Dakota County Community Development Agency (the “CDA”) formerly known as the Dakota County Housing and Redevelopment Authority, created Tax Increment Financing District No. 10 (the “District”) and approved a Tax Increment Financing Plan (the “TIF Plan”), for the District; and

WHEREAS, the County Auditor of Dakota County certified the original net tax capacity and the original local tax rate of the District pursuant to the provisions of Minnesota Statutes, Section 469.177; and

WHEREAS, the CDA entered into a Contract for Private Development (the “Contract”) with the City of West St. Paul (the “City”) and Signal Hills Company II, LLP, now called RPS Legacy DeSoto, LLC, (the “Property Owner”) in 1999 to provide a PAYGO TIF loan to the Property Owner for up to $3.3 million with funds from the available increment generated by the District; and

WHEREAS, the City and the Property Owner, have requested the early decertification of the District and the termination of the Contract so that a new TIF District can be established on the property known as the Signal Hills Shopping Center; and

WHEREAS, as of the date hereof, the projects have been completed, all obligations to which tax increment from the District has been pledged have been paid in full or defeased, and the CDA has determined it is in the best interests of the CDA to terminate and decertify the district.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That:

1. Tax Increment Financing District No. 10 is hereby terminated as of December 31,2020. 2. The Executive Director shall provide a copy of this resolution to the County Auditor of Dakota County so that the District may be decertified on the books and records of the County Auditor with - 7 - no further tax increment from the District being remitted to the City.

BE IT FURTHER RESOLVED that when all eligible expenses of the above described district have been paid, the Finance Officer is authorized to establish any appropriations necessary to return any surplus tax increment revenue to Dakota County for redistribution to the City of West St. Paul, Dakota County, and Independent School District 197 in accordance with Minnesota Statutes, Section 469-176, Subd. 2.

BE IT FURTHER RESOLVED that Dakota County Community Development Agency staff is directed to prepare and submit to the Office of the State Auditor and Dakota County all documentation necessary to formalize the decertification of the above described district.

BE IT FURTHER RESOLVED that the Dakota County Community Development Agency hereby terminates the Contract for Private Development with the City of West St. Paul and Signal Hills Company II, LLP, now called RPS Legacy DeSoto, LLC effective November 17, 2020.

Authorization To Execute Local Housing Incentives Account Grant Agreement With Metropolitan 20-6342 Council For Prairie Estates Development in Inver Grove Heights

WHEREAS, Twin Cities Housing Development Corporation (TCHDC), acting as general partner of Prairie Estates LLLP (developer), acquired and is substantially rehabilitating the Prairie Estates multifamily development in the city of Inver Grove Heights; and

WHEREAS, Prairie Estates is a 40-unit federally subsidized townhome development comprised of two-, three-, and four-bedroom units that opened in 19808; and

WHEREAS, TCHDC was awarded 9% tax in 2019 from the Dakota County Community Development Agency (CDA) as the primary financial source for the Prairie Estates acquisition/substantial rehabilitation project; and

WHEREAS, TCHDC was also awarded $350,000 of Local Housing Incentives Account (LHIA) funds from Metropolitan Council in December 2019; and

WHEREAS, Private developers cannot be direct recipients of LHIA funds; and

WHEREAS, Metropolitan Council requested the Dakota County CDA administer the LHIA funds due to our financial investment in the Prairie Estates development; and

WHEREAS, Dakota County CDA will be responsible for executing the LHIA grant agreement between the CDA and Metropolitan Council, passing the LHIA funds to the development partnership (Prairie Estates LLLP) for eligible expenses, and submitting status reports and reimbursement requests on behalf of the project.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That staff is authorized to execute the Local Housing Incentives Account (LHIA) grant agreement in the amount of $350,000 for the Prairie Estates development.

Authorization To Provide Local Housing Incentive Account Funds For Prairie Estates And Execute 20-6343 Related Documents

WHEREAS, Twin Cities Housing Development Corporation (TCHDC), acting as general partner of Prairie Estates LLLP ((Developer), acquired and is substantially rehabilitating the Prairie Estates multifamily development in the City of Inver Grove Heights (the “Project”); and

WHEREAS, the Project will be owned by Prairie Estates LLLP, a Minnesota limited liability limited partnership (the “Borrower”); and

WHEREAS, the Project was awarded $350,000 in Local Housing Incentives Account (LHIA) from the Metropolitan Council for the Project and the CDA was selected as the grant administrator of these funds; and

WHEREAS, the LHIA loan will be in the amount of $350,000 structured with a zero percent interest rate - 8 - with a 40-year period of affordability payable after 40 years or upon the earlier sale or transfer of the Project.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That staff is authorized to prepare, execute and deliver all documents necessary or convenient to provide a LHIA loan between the Dakota County Community Development Agency and the Borrower.

BE IT FURTHER RESOLVED that the Executive Director is authorized to execute related documents.

Motion: Commissioner Egan Second: Commissioner Holberg

Ayes: 7 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X

REGULAR AGENDA

Conduct A Public Hearing For The Issuance Of Multifamily Housing Revenue Bonds Or Notes For 20-6344 The Legacy Commons At Signal Hills Project And Authorization To Issue Bonds Or Notes And 4% Tax Credits And Execute Related Documents

Kathy Kugel presented.

WHEREAS, the Dakota County Community Development Agency (the “CDA”) is authorized by the laws of the State of Minnesota, particularly Minnesota Statutes, Chapters 462A, 462C and 474A, as amended (the “Act”), to issue its revenue obligations to finance multifamily rental housing developments pursuant to housing finance programs adopted by the CDA and to enter into any agreements in connection therewith; and

WHEREAS, the CDA proposes to finance the acquisition, construction and equipping of a senior multifamily rental housing development consisting of approximately 247 units and certain functionally related improvements thereto, designed for occupancy by low- and moderate – income seniors and located at 50 Signal Hills Center in the City of West St. Paul, Minnesota (the “Project”), through the issuance of its Multifamily Housing Revenue Note (Legacy Commons at Signal Hills Project), Series 2020 (the “Note”) in an aggregate principal amount not to exceed $35,500,000; and

WHEREAS, the Project will be owned by West St. Paul Leased Housing Associates II, LLLP, a Minnesota limited liability limited partnership (the “Borrower”); and

WHEREAS, proceeds of the Note will be loaned to the Borrower (the “Project Loan”) pursuant to the terms of the Project Loan Agreement (the “Project Loan Agreement”) between the CDA, the Fiscal Agent and the Borrower; and

WHEREAS, the Note will be issued pursuant to a Funding Loan Agreement (the “Funding Loan Agreement”), between the CDA, U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”) and America First Multifamily Investors, L.P., a Delaware limited partnership, as the initial funding lender (the “Initial Funding Lender”), and will be secured by revenues of the Project pledged to the payment thereof and certain reserves established in connection with the issuance thereof and by a Tax-Exempt Mortgage, Security Agreement and Fixture Financing Statement, made by the Borrower in favor of the CDA (the “Mortgage”), and a Tax Exempt Assignment of Leases and Rents made by the Borrower in favor of the CDA (the “Assignment of Leases and Rents”), and an assignment by the CDA to the Fiscal Agent pursuant to an Assignment of Tax-Exempt Mortgage, Security Agreement and Fixture Financing Statement and - 9 - Tax-Exempt Assignment of Leases and Rents (the “Assignment of Mortgage”); and

WHEREAS, pursuant to the Act, the CDA has developed a Multifamily Housing Financing program in the form attached hereto as Exhibit A (the “Program”) providing for the issuance of the Note and has submitted the program to the Metropolitan Council as required by law; and

WHEREAS, on the date hereof, the CDA held a public hearing, following publication of notice as required by law, regarding the adoption of the Program and the issuance of the Note; and

WHEREAS, the Borrower has applied to the CDA for an allocation of “automatic” four percent low income housing tax credits for the Project (the “Tax Credit Application”).

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, as follows:

1. Public Hearing. That a public hearing has been conducted in accordance with law and closed.

2. Program. The Program is hereby adopted.

3. Findings. The CDA hereby finds that the issuance, sale, and delivery of the Note and the loan of the proceeds thereof to the Borrower to finance the Project in accordance with the program and the Project Loan Agreement are consistent with the purposes of the Act. The CDA further finds that the Project and the Borrower’s Tax Credit Application comply with the applicable requirements of the CDA’s current Qualified Allocation Plan for four percent low income housing tax credits.

4. Authorization of Issuance and Delivery of the Note. In order to finance the Project and pay costs of issuance, the CDA hereby authorizes the issuance and delivery of the Note. The note shall be dated, shall mature, shall bear interest, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as are prescribed in the Funding Loan Agreement and the Project Loan Agreement in substantially the forms now on file with the CDA, subject to such changes not inconsistent with applicable law that are approved by the Executive Director. The issuance and delivery of the Note shall be conclusive evidence that the Executive Director has approved all provisions of the Note as issued and any changes to the form of the Note on file with the CDA on the date hereof. The final terms of the Note will be determined by the Executive Director of the CDA, with the aggregate principal amount of the Note expected not to exceed $35,500,000.

5. Special Obligation. The Note shall be a special limited obligation of the CDA payable solely from the revenues generated by the Project. The Note does not constitute an indebtedness, liability, general or moral obligation (except to the extent of the assets pledged to the holder of the Note pursuant to the Funding Loan Agreement or Assignment of Mortgage) or a pledge of the faith and credit or any taxing power of the CDA, the county, the State of Minnesota, or any political subdivision thereof.

6. Applicable Elected Representative. The members of the Board of Commissioners of the CDA are the elected members of the Dakota County Board of Commissioners. Accordingly, approval of the issuance of the Note by the Board of Commissioners constitutes approval by the applicable elected representative of the CDA, as required by Section 147(f) of the Code.

7. Documents. The following Note documents have been submitted to the CDA for approval:

a. The Funding Loan Agreement; b. The Project Loan Agreement; c. The Note; d. The Assignment of Mortgage; and e. A Regulatory Agreement between the CDA, the Fiscal Agent and the Borrower.

8. Approval and Execution of Documents. The Executive Director of the CDA, or in his absence, the Deputy Executive Director or any member of the Board of Commissioners of the CDA (the “CDA Official”), is hereby authorized and directed to enter into, execute, and deliver the Documents, together with any other documents necessary or convenient in connection with the issuance of - 10 - the Noe, and is hereby authorized and directed to execute and deliver the Note in accordance with the terms of the Funding Loan Agreement. The Documents shall be substantially in the form now on file with the CDA, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Executive Director, in his discretion, shall determine, and the execution and delivery thereof by the CDA Official shall be conclusive evidence of such determination.

The Funding Loan Agreement and the Note shall provide the forms and conditions, covenants, rights, obligations, duties and agreements of the holder of the Note and the CDA, as set forth therein.

All the provisions of the Documents, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof.

9. Additional Certificates, Instruments and Documents. The CDA Official is hereby authorized to execute and deliver, on behalf of the CDA, such other certificates, instruments, and other documents as are necessary, customary, or appropriate in connection with the issuance, sale, and delivery of the Note, or are necessary to establish the validity or enforceability of the Note, or are required by bond counsel to establish the validity or enforceability of the Note or the exclusion from gross income of interest on the Note for purposes of federal and State of Minnesota income taxation.

10. Borrower Documents. In connection with the issuance of the Note and the making of the Project Loan, the Borrower will be required to execute and deliver: (i) the Project Loan Agreement and the other Documents to be executed by the Borrower; (ii) the Mortgage and the Assignment of Leases and Rents, as subsequently assigned to the Fiscal Agent by the CDA, pursuant to which the Borrower will provide a mortgage lien on the Project to secure the Project Loan and the Note; and (iii) other documents, instruments, and security of any nature required by the CDA, Initial Funding Lender or bond counsel.

11. Volume Cap. The Note shall be allocated first to available carry-forward entitlement bond volume cap of the CDA, and then to the current year’s entitlement bond volume cap.

12. 42(m) Letters. The Executive Director is authorized and directed to approve the amount of “automatic” 4% low income housing tax credits allocable to the Project, and to execute and deliver to the Borrower, on behalf of the CDA, a letter or letters required by Sections 42(m)(1)(D) and 42(m)(2)(D) of the internal Revenue Code of 1986, as amended, and to take such other actions as may be necessary or convenient in connection with the allocation of the Projects of “automatic” four percent tax credits.

13. Limited Liability. All covenants, stipulations, obligations, and agreements of the CDA contained in this resolution and the aforementioned certificates, instruments, and Documents shall be deemed to be the covenants, stipulations, obligations, and agreements of the CDA to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations, and agreements shall be binding upon the CDA. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned certificates, instruments, or Documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the Board of Commissioners of the CDA, or any officer, agent, or employee of the CDA in that person’s individual capacity, and neither the Board of Commissioners of the CDA nor any officer or employee executing the Note shall be liable personally on the Note or be subject to any personal liability or accountability by reason of the issuance thereof.

No provision, covenant, or agreement contained in the aforementioned certificates, instruments, or Documents, or in the Note, or in any other document related to the note,, and no obligation therein or herein imposed upon the CDA or the breach thereof, shall constitute or give rise to any pecuniary liability of the CDA or any charge upon its general credit or taxing powers. The Note shall never constitute an indebtedness of the CDA within the meaning of any provision or limitation of the Minnesota Constitution or statutes and shall not constitute or give rise to any pecuniary liability of the CDA or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the CDA - 11 - has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Project Loan Agreement and which are to be applied to the payment of the Note, as provided therein.

14. Third Parties. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the CDA or any owner of the Note issued under the provisions of this resolution any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision hereof, this resolution, the aforementioned documents, and all of their provisions being intended to be and being for the sole and exclusive benefit of the CDA and any owner from time to time of the Note issued under the provisions of this resolution.

15. Invalid Provisions. In case any one or more of the provisions of this resolution or any of the Documents shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution or of the Documents, but this resolution and Documents shall be construed and endorsed as if such illegal or invalid provision had not been contained therein.

16. Note Recital. The Note, when executed and delivered, shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Note and the regularity of the issuance thereof and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Note, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to and in the enactment of this resolution, and precedent to issuance of the Note, and precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law.

17. CDA Official. The CDA Official is hereby authorized to do all acts and things required of him or her by or in connection with this resolution, the aforementioned certificates, instruments, or Documents, and the Note for the full, punctual, and complete performance of all the terms, covenants, and agreements contained int eh Note, the aforementioned certificates, instruments, and documents, and this resolution. If any person whose signature appears on any of the foregoing certificates, instruments, or documents shall cease to be a CDA Official before the date of issuance of the Note, such signature shall, nevertheless, be valid and sufficient for all purposes.

18. Future Amendments. The authority to approve, execute and deliver future amendments to the Documents relating to the Note is hereby delegated to the Executive Director, subject to the following conditions: (a) the holder of the Note has consented to such amendment; (b) such amendments do not materially adversely affect the interests of the CDA; (c) such amendments do not contravene or violate any policy of the CDA; (d) such amendments are acceptable in form and substance to bond counsel or other counsel retained by the CDA to review such amendments; and € the CDA has received an opinion of bond counsel to the effect that the amendments will not adversely affect the tax-exempt character of interest on the Note. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the Executive Director shall be conclusive evidence of the approval of such instruments in accordance with the terms thereof.

EXHIBIT A

DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY

MULTIFAMILY HOUSING FINANCE PROGRAM

Pursuant to Minnesota Statutes, Chapters 462A, 462C and 474A (together, the “Act”), the Dakota County Community Development Agency (the “CDA”) is authorized to undertake multifamily housing development projects and to issue its revenue bonds to finance such projects. - 12 -

Minnesota Statutes, Section 462C.03, requires the adoption of a housing program following a public hearing prior to the issuance of housing revenue bonds or other obligations under Section 462C.

West St. Paul Leased Housing Associates II, LLLP, a Minnesota limited liability limited partnership (the “Borrower”), has requested that the CDA adopt this Multifamily Housing Finance Program (the “Program”) in connection with the issuance by the CDA of its multifamily housing revenue notes or bonds in one or more series (the “Bonds”) to finance the acquisition and construction of a multifamily rental housing development consisting of approximately 247 units and certain functionally related improvements thereto, designed for occupancy by low-and moderate income seniors and to be known as Legacy Commons at Signal Hills and located at 50 Signal Hills Center in the City of West St. Paul, Minnesota (the “Project”), and to be owned and operated by the Borrower.

The Project will be acquired and constructed in accordance with the requirements of Subdivisions 1 and 2 of Section 462C.05 of the Act.

The CDA has determined that undertaking the Project furthers the CDA’s local and regional housing policies and is in the best interest of the public health, safety and welfare of the people of Dakota County.

Section A. Program For Financing the Project. The CDA is establishing this Program to provide financing for acquisition and construction of the Project at such costs and upon such other terms and conditions as may be determined by the CDA in accordance with the Act. The proceeds of the Bonds and certain equity generated by low-income housing tax credits will be applied by the Borrower to finance the acquisition, construction and equipping of the Project and to pay the costs of issuing the Bonds.

Section B. Local Contributions To The Program. The Borrower expects to pay certain administrative costs of the Program from Bond proceeds and revenues generated by the Project. The Bonds will be secured by a pledge of specific revenues and a mortgage on the Project. The CDA will not make any contribution to the cost of the Project. The CDA will not hire additional staff for the administration of this Program.

Section C. Standards and Requirements Relating to the Financing of the Project Pursuant to the Program. The following standards and requirements shall apply with respect to the operation of the Project by the Borrower:

(1) Substantially all the proceeds of the sale of the Bonds will be applied to the acquisition, construction and equipping of the Project and payment of costs of issuance. The proceeds will be made available to the Borrower pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Borrower to the CDA regarding the use of proceeds and the character and use of the Project.

(2) The Borrower, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, sex, marital status, or status with regard to public assistance or disability.

(3) Pursuant to Section 142(d) of the Internal Revenue Code of 1986, as amended, either 20% or more of the units in the Project shall be occupied by persons at 50% or less of the area median income or 40% or more of the units in the Project shall be occupied by persons at 60% or less of the area median income. Pursuant to Minnesota Statutes, Section 474A.047, Subd. 1, the maximum rent for at least 20% of the units in the Project will not exceed the area fair market rents or exception fair market rents for existing housing, if applicable, established by HUD.

(4) Pursuant to Section 462C.05, Subd. 2 of the Act, the Project will be designed to be affordable by persons with adjusted gross income lower than 110% of area median income.

Section D. Issuance of Bonds. To finance the Project pursuant to this Program, the CDA expects to issue the Bonds in one or more series in an aggregate principal amount not exceeding $35,500,000. It is anticipated that the Bonds issued under this Program will have a final maturity of forty (40) years or less. The Bonds will be priced to the market at the time of issuance. - 13 -

The cost of the Project may change between the date of preparation of this Program and the date of issuance of Bonds for the Project.

Section E. Severability. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the CDA or otherwise illegal or inoperative by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions.

Section F. Amendment. The CDA shall not amend this Program, while Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds.

Section G. Volume Cap. The Bonds will require volume cap. The Issuer has 2019 carryforward allocation in the amount of $36,651,841 and 2020 allocation in the amount of $26,642,126 available for qualified residential rental projects, a portion of which may be used to issue the Bonds.

CONDUCT AND CLOSE PUBLIC HEARING Motion: Commissioner Gaylord Second: Commissioner Holberg

Ayes: 7 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X

ACTION ITEM/RESOLUTION Motion: Commissioner Gaylord Second: Commissioner Egan

Ayes: 6 Nays: 1 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X

Conduct A Public Hearing For The Issuance Of Multifamily Housing Revenue Bonds or Notes For 20-6345 The Hilltop At Signal Hills Project And Authorization to Issue Bonds Or Notes And 4% Tax Credits And Execute Related Documents

WHEREAS, the CDA proposed to finance the acquisition, construction, and equipping of a multifamily rental housing development consisting of approximately 146 units and certain functionally related improvements thereto, designed for occupancy by low – and moderate income households and located at 50 Signal Hills Center in the city of West St Paul, Minnesota (the “Project”), through the issuance of its

- 14 - Multifamily Housing Revenue Bonds (Hilltop at Signal Hills Project), Series 2021 (the “Note”) in an aggregate principal amount not to exceed $25,500,000; and

WHEREAS, the Project will be owned by West St. Paul Leased Housing Associates II, LLLP, a Minnesota limited liability limited partnership (the “Borrower”); and

WHEREAS, proceeds of the Note will be loaned to the Borrower (the “Project Loan”) pursuant to the terms of a Project Loan Agreement (the “Project Loan Agreement”) between the CDA, the Fiscal Agent and the Borrower; and

WHEREAS, the Note will be issued pursuant to a Funding Loan Agreement (the “Funding Loan Agreement”), between the CDA, U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”) and America First Multifamily Investors, L.P., a Delaware limited partnership, as the initial funding lender (the “Initial Funding Lender”), and will be secured by revenues of the Project pledged to the payment thereof and certain reserves established in connection with the issuance thereof and by a Tax-Exempt Mortgage, Security Agreement and Fixture Financing Statement, made by the Borrower in favor of the CDA (the “Mortgage”), a Tax-Exempt Assignment of Leases and Rents made by the Borrower in favor of the CDA (the “Assignment of Leases and Rents”), and an assignment by the CDA to the Fiscal Agent pursuant to an Assignment of Tax-Exempt Mortgage, Security Agreement and Fixture Financing Statement and Tax- Exempt Assignment of Leases and Rents (the “Assignment of Mortgage”); and

WHEREAS, pursuant to the Act, the CDA has developed a Multifamily Housing Financing Program in the form attached hereto as Exhibit A (the “Program”) providing for the issuance of the Bonds and has submitted the program to the Metropolitan Council as required by law; and

WHEREAS, on the date hereof, the CDA Board held a public hearing, following publication of notice as required by law, regarding the adoption of the Program and the issuance of the Bonds; and

WHEREAS, the Borrower has applied to the CDA for an allocation of “automatic” 4% low income housing tax credits for the Project (the “Tax Credit Application”).

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, as follows:

1. Public Hearing. That a public hearing has been conducted in accordance with law and closed.

2. Program. The Program is hereby adopted.

3. Findings. The CDA hereby finds that the issuance, sale and delivery of the Note and the loan of the proceeds thereof to the Borrower to finance the Project in accordance with the Program and the Project Loan Agreement are consistent with the purposes of the Act. The CDA further finds that the Project and the Borrower's Tax Credit Application comply with the applicable requirements of the CDA's current Qualified Allocation Plan for four percent low income housing tax credits.

4. Authorization of Issuance and Delivery of the Note. In order to finance the Project and pay costs of issuance, the CDA hereby authorizes the issuance and delivery of the Note. The Note shall be dated, shall mature, shall bear interest, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as are prescribed in the Funding Loan Agreement and the Project Loan Agreement in substantially the forms now on file with the CDA, subject to such changes not inconsistent with applicable law that are approved by the Executive Director. The issuance and delivery of the Note shall be conclusive evidence that the Executive Director has approved all provisions of the Note as issued and any changes to the form of the Note on file with the CDA on the date hereof. The final terms of the Note will be determined by the Executive Director of the CDA, with the aggregate principal amount of the Note expected not to exceed $25,500,000.

5. Special Obligation. The Note shall be a special limited obligation of the CDA payable solely from the revenues generated by the Project. The Note does not constitute an - 15 - indebtedness, liability, general or moral obligation (except to the extent of the assets pledged to the holder of the Note pursuant to the Funding Loan Agreement or Assignment of Mortgage) or a pledge of the faith and credit or any taxing power of the CDA, the County, the State of Minnesota, or any political subdivision thereof.

7. Documents. The following Note documents have been submitted to the CDA for approval:

a. the Funding Loan Agreement; b. the Project Loan Agreement; c. the Note; d. the Assignment of Mortgage; and e. a Regulatory Agreement between the CDA, the Fiscal Agent and the Borrower.

8. Approval and Execution of Documents. The Executive Director of the CDA, or in his absence, the Deputy Executive Director or any member of the Board of Commissioners of the CDA (the “CDA Official”), is hereby authorized and directed to enter into, execute, and deliver the Documents, together with any other documents necessary or convenient in connection with the issuance of the Note, and is hereby authorized and directed to execute and deliver the Note in accordance with the terms of the Funding Loan Agreement. The Documents shall be substantially in the form now on file with the CDA, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Executive Director, in his discretion, shall determine, and the execution and delivery thereof by the CDA Official shall be conclusive evidence of such determination.

The Funding Loan Agreement and the Note shall provide the forms and conditions, covenants, rights, obligations, duties, and agreements of the holder of the Note and the CDA, as set forth therein.

11. Volume Cap. The Note shall be allocated first to available carry-forward entitlement bond volume cap of the CDA, and then to the current year's entitlement bond volume cap.

- 16 - 12. 42(m) Letters. The Executive Director is authorized and directed to approve the amount of "automatic" four percent low income housing tax credits allocable to the Project, and to execute and deliver to the Borrower, on behalf of the CDA, a letter or letters required by Sections 42(m)(1)(D) and 42(m)(2)(D) of the Internal Revenue Code of 1986, as amended, and to take such other actions as may be necessary or convenient in connection with the allocation to the Project of "automatic" four percent tax credits.

No provision, covenant, or agreement contained in the aforementioned certificates, instruments, or Documents, or in the Note, or in any other document related to the Note, and no obligation therein or herein imposed upon the CDA or the breach thereof, shall constitute or give rise to any pecuniary liability of the CDA or any charge upon its general credit or taxing powers. The Note shall never constitute an indebtedness of the CDA within the meaning of any provision or limitation of the Minnesota Constitution or statutes and shall not constitute or give rise to any pecuniary liability of the CDA or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the CDA has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Project Loan Agreement and which are to be applied to the payment of the Note, as provided therein.

15. Invalid Provisions. In case any one or more of the provisions of this resolution or any of the Documents shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution or of the Documents, but this resolution and the Documents shall be construed and endorsed as if such illegal or invalid provision had not been contained therein.

17. CDA Official. The CDA Official is hereby authorized to do all acts and things required of him or her by or in connection with this resolution, the aforementioned certificates, instruments, or Documents, and the Note for the full, punctual, and complete - 17 - performance of all the terms, covenants, and agreements contained in the Note, the aforementioned certificates, instruments, and documents, and this resolution. If any person whose signature appears on any of the foregoing certificates, instruments, or documents shall cease to be a CDA Official before the date of issuance of the Note, such signature shall, nevertheless, be valid and sufficient for all purposes.

18. Future Amendments. The authority to approve, execute and deliver future amendments to the Documents relating to the Note is hereby delegated to the Executive Director, subject to the following conditions: (a) the holder of the Note has consented to such amendment; (b) such amendments do not materially adversely affect the interests of the CDA; (c) such amendments do not contravene or violate any policy of the CDA; (d) such amendments are acceptable in form and substance to bond counsel or other counsel retained by the CDA to review such amendments; and (e) the CDA has received an opinion of bond counsel to the effect that the amendments will not adversely affect the tax-exempt character of interest on the Note. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the Executive Director shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof.

EXHIBIT A

DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY

MULTIFAMILY HOUSING FINANCE PROGRAM

Minnesota Statutes, Section 462C.03, requires the adoption of a housing program following a public hearing prior to the issuance of housing revenue bonds or other obligations under Section 462C.

West St. Paul Leased Housing Associates I, LLLP, a Minnesota limited liability limited partnership (the “Borrower”), has requested that the CDA adopt this Multifamily Housing Finance Program (the “Program”) in connection with the issuance by the CDA of its multifamily housing revenue notes or bonds in one or more series (the “Bonds”) to finance the acquisition and construction of a multifamily rental housing development consisting of approximately 146 units and certain functionally related improvements thereto, designed for occupancy by low-and moderate income households and to be known as Hilltop at Signal Hills and located at 50 Signal Hills Center in the City of West St. Paul, Minnesota (the “Project”), and to be owned and operated by the Borrower.

The Project will be acquired and constructed in accordance with the requirements of Subdivisions 1 and 2 of Section 462C.05 of the Act.

- 18 - make any contribution to the cost of the Project. The CDA will not hire additional staff for the administration of this Program.

(1) Substantially all of the proceeds of the sale of the Bonds will be applied to the acquisition, construction and equipping of the Project and payment of costs of issuance. The proceeds will be made available to the Borrower pursuant to the terms of the Bond offering, which will include certain covenants to be made by the Borrower to the CDA regarding the use of proceeds and the character and use of the Project.

(4) Pursuant to Section 462C.05, Subd. 2 of the Act, the Project will be designed to be affordable by persons with adjusted gross income lower than 110% of area median income.

Section D. Issuance of Bonds. To finance the Project pursuant to this Program, the CDA expects to issue the Bonds in one or more series in an aggregate principal amount not exceeding $2625,500,000. It is anticipated that the Bonds issued under this Program will have a final maturity of forty (40) years or less. The Bonds will be priced to the market at the time of issuance.

The cost of the Project may change between the date of preparation of this Program and the date of issuance of Bonds for the Project.

Section F. Amendment. The CDA shall not amend this Program, while Bonds authorized hereby are outstanding, to the detriment of the holders of such Bonds.

Section G. Volume Cap. The Bonds will require volume cap. The Issuer anticipates having calendar year 2021 allocation available in early January 2021 for qualified residential rental projects, a portion of which may be used to issue the Bonds.

CONDUCT AND CLOSE PUBLIC HEARING Motion: Commissioner Gaylord Second: Commissioner Holberg

Ayes: 7 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X - 19 - Workman X Holberg X Gerlach X

ACTION ITEM/RESOLUTION Motion: Commissioner Gaylord Second: Commissioner Egan

Ayes: 6 Nays: 1 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X

Authorize The Levy Of A Special Benefit Tax Pursuant To Minn. Stat. 469.033, Subd. 6 And 20-6346 383D.41

WHEREAS, the Dakota County Community Development Agency (CDA) is organized and existing under Minnesota Statutes, Section 383D.41, as amended (Enabling Act); and

WHEREAS, pursuant to the Enabling Act, the CDA has all the powers and duties of a housing and redevelopment authority under the provisions of the Municipal Housing and Redevelopment Act, Minnesota Statutes, Sections 469.001 to 469.047 (HRA Act), those powers of an Economic Development Authority under Minnesota Statutes, Sections 469.090 to 469.1081 (EDA Act) expressly granted by the Dakota County Board, and the authority to levy the special benefit tax with the approval of the Dakota County Board as permitted under the HRA Act at such higher limits as may be permitted under either the HRA Act or the EDA Act; and

WHEREAS, pursuant to the Enabling Act, for the purpose of applying the provisions of the HRA Act to the CDA, Dakota County (County) is deemed to have all powers and duties of a municipality under the HRA Act and the Board of Commissioners of the County is deemed to have all powers and duties of a governing board of a municipality under the HRA Act; and

WHEREAS, by Resolution 94-926, dated December 6, 1994 the Dakota County Board authorized the CDA to levy and collect the Special Benefit Tax levy authorized by the HRA Act without subsequent annual approval of the County; and

WHEREAS, the HRA levy limit at the time of Resolution 94-926 was 0.0144 percent of estimated market value and the CDA has subsequently requested approval by the county Board of Commissioners for any levy request above 0.0144 percent of estimated market value; and

WHEREAS, the CDA Board of Commissioners approved the initial authorization and budget for the proposed levy at its September 15, 2020 meeting and the Dakota County Board of Commissioners approved the CDA’s proposed 2021 Special Benefit Levy at 0.0164 percent of estimated market value at its November 3, 2020 meeting; and

WHEREAS, the CDA is required pursuant to Section 469.033, Subdivision 6, of the HRA Act to formulate and file a budget with the County, and the amount of the Special Benefit Tax levy for the following year shall be based on that budget; and

WHEREAS, the CDA Board has before it, for its consideration a copy of a final budget for the use of 2021 levy proceeds, based on a Special Benefit Tax of 0.0164 percent of estimated market value, for the payment of debt service for the CDA’s Senior Housing Program and other CDA initiatives.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That: - 20 -

Section 1. The Year 2021 levy budget of $8,786,895 presented for consideration by the Board of Commissioners of the CDA is hereby in all respects approved.

Section 2. There is hereby levied pursuant to Minnesota Statutes, Section 469.033, Subdivision 6 a special benefit tax in the amount of the sum of (a) the lesser of 0.0144 percent of the estimated market value within the County or $7,707,409 and (b) subject to approval of the county, an additional levy in the amount of the lesser of 0.002 percent of the estimated market value within the County or $1,079,486 for a total of 0.0164 percent of the estimated market value within the County or $8,786,895.

Motion: Commissioner Holberg Second: Commissioner Slavik

Ayes: 7 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X

20-6347 Adoption Of 2021 CDA Board Of Commissioners Meeting Dates

NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Community Development Agency Board of Commissioners hereby adopts the following 2021 meeting schedule:

• Tuesday, January 19, 2021 – Annual Meeting at 3:15 p.m.; Regular Meeting at 3:30 p.m. • Tuesday, February 16, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, March 16, 2021 – Budget Workshop at 2:00 p.m.; Regular Meeting at 3:30 p.m. • Tuesday, April 20, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, May 18, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, June 15, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, July 20, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, August 17, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, September 21, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, October 19, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, November 16, 2021 – Regular Meeting at 3:30 p.m. • Tuesday, December 14, 2021 – Regular Meeting at 3:30 p.m.

BE IT FURTHER RESOLVED, That the location of all of the 2021 meetings will be Boardroom at the CDA’s office located at 1228 Town Centre Drive, Eagan, MN 55123.

Motion: Commissioner Workman Second: Commissioner Atkins

Ayes: 7 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X

- 21 - INFO CDA COVID-19 Response And Executive Director’s Update

Tony Schertler and Anna Judge provided updates.

ADJOURNMENT

20-6348 Adjournment

BE IT RESOLVED, that the Dakota County Community Development Agency Board of Commissioners

hereby adjourns until Tuesday, December 15, 2020.

Motion: Commissioner Egan Second: Commissioner Workman

Ayes: 7 Nays: 0 Abstentions: 0

Yes No Absent Abstain Slavik X Gaylord X Egan X Atkins X Workman X Holberg X Gerlach X Cummings X

The CDA Board meeting adjourned at 4:16 p.m.

______CDA Board Chairperson CDA Board Secretary

- 22 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Scheduling Of A Public Hearing To Receive Comments On The Revised 2020 Public Housing Agency Five Year Plan And 2021 Annual Plan

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Housing Assistance Amount included in current budget Prepared By: Lisa Hohenstein Budget amendment requested Contact: Lisa Hohenstein FTE included in current complement Contact Phone: 651-675-4543 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Schedule A Public Hearing On The Revised 2020 5-Year And 2021 Annual Public Housing Agency Plans.

SUMMARY As an administrator of the Housing Choice Voucher and Public Housing programs, the Dakota County Community Development Agency (CDA) is required to prepare a Five Year and Annual Update to its Public Housing Agency Plan (PHA Plan) and complete it by using the Department of Housing and Urban Developments (HUD) prescribed template.

The 2020 Five Year and 2021 Annual PHA Plan outlines updates to the goals and objectives for the Housing Choice Voucher and Public Housing programs.

HUD requires a 45-day public comment period and a public hearing. The public comment period was published in the Dakota County Tribune and posted on the CDA’s website beginning December 3, 2020. Letters were sent to city officials in cities where public housing units are located to review the plan and provide comment.

The proposed public hearing will take place at the January 19, 2021 CDA Board meeting.

RECOMMENDATION Staff recommends scheduling a public hearing to receive comments on the CDA’s Revised 2020 Pubic Housing Agency Five Year and 2021 Annual Plan.

EXPLANATION OF FISCAL/FTE IMPACT Programs described in the PHA Annual Plan are funded through HUD federal allocations.

- 23 - Supporting Documents: Previous Board Action(s): 20-6240 (3/17/2020)

Resolution No. 20-XXXX

Scheduling Of A Public Hearing To Receive Comments On The Revised 2020 Five Year Public Housing Agency Plan And 2021 Annual Plan

WHEREAS, Section 511 of the Quality Housing and Work Responsibility Act (QHWRA) of 1998 and the ensuing HUD requirements mandates that agencies with Section 8 and/or Public Housing Programs once every five years submit a Five Year Strategic Plan and an Annual Agency Plan Update including the 2021 Capital Fund Program Annual Statement and the Performance and Evaluation Report; and

WHEREAS, Section 511 of the Quality Housing and Work Responsibility Act of 1998 also requires that after a 45-day public comment period, the Board of Commissioners of the Agency responsible for the Agency Plan conducts a public hearing;

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That a public hearing be conducted at their regular meeting January 19, 2021.

Executive Director’s Comments: Strategic Plan Priorities: Recommend Action Item Type-Consent Focused Housing Programs Do Not Recommend Action Item Type-Discussion Collaboration Reviewed-No Recommendation Item Type-Informational Development/Redevelopment Reviewed-Information Only Financial Sustainability Submitted at Commissioner Request Operational Effectiveness

______Executive Director Department Director

- 24 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Approval Of Amendments To The Housing Choice Voucher Administrative Plan

PURPOSE/ACTION REQUESTED • Approve amendments to the Housing Choice Voucher Administrative Plan.

SUMMARY The Dakota County Community Development Agency (CDA), as an administrator of the federal Housing Choice Voucher (HCV) program, is required to adopt and maintain an administrative plan to delineate the mandatory and discretionary policies used to govern the program. Periodically, the plan needs to be updated as the U.S. Department of Housing and Urban Development adopts new or revised regulations and as the agency determines a need to revise its policies.

Attachment A is the edited chapter of the CDA’s HCV Administrative Plan.

Changes are for: • Regulatory and administrative changes and clarifications. • Addition of Mainstream voucher waiting list preference status. • Addition of Housing Trust Fund policy.

RECOMMENDATION Staff recommends adopting the proposed revisions to ensure program compliance.

EXPLANATION OF FISCAL/FTE IMPACT N/A

- 25 - Supporting Documents: Previous Board Action(s): Attachment A: Applicable Chapter of the HCV Administrative Plan

Resolution No. 20-XXXX

Approval Of Amendments To The Housing Choice Voucher Administrative Plan

WHEREAS, the Dakota County Community Development Agency (CDA), as an administrator of the federal Housing Choice Voucher (HCV) program, is required to adopt and maintain an administrative plan to delineate the mandatory and discretionary policies used to govern the program; and

WHEREAS, the Dakota County CDA has made updates to the HCV Administrative Plan to include changes to the Housing Quality Standards (HQS) inspections.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That the amendments to the Housing Choice Voucher Administrative Plan are approved.

______Executive Director Department Director

- 26 - 3B - Attachment A

ADMINISTRATIVE PLAN

FOR THE

HOUSING CHOICE VOUCHER PROGRAM

Approved by the CDA Board of Commissioners: December 14, 2010 Amended: March 15, 2011 Amended: March 20, 2012 Amended: March 19, 2013 Amended: September 23, 2014 Amended: June 16, 2015 Amended: December 15, 2015 Amended June 21, 2016 Amended November 15, 2016 Amended June 15, 2017 Amended August 30, 2017 Amended May 22, 2018 Amended September 17, 2019 Amended March 17, 2020 Amended June 16, 2020 Amended July 14, 2020 Amended December 15, 2020 Submitted to HUD: December 20, 2010

- 27 - Resources and Where to Find Them Following is a list of resources helpful to the CDA or referenced in the administrative plan, and the online location of each.

Document and Location Code of Federal Regulations https://www.ecfrgpoaccess.gov/cfr/index.html Earned Income Disregard FAQ www.hud.gov/offices/pih/phr/about/ao_faq_eid.cfmhttps://www.hud.gov/program_offices/public_indian_housing/phr/abo ut/ao_faq_eid Eligibility of Students for Assisted Housing Under Section 8 of the U.S. Housing Act of 1937; Final Rule http://edocket.access.gpo.gov/2008/pdf/E8-19435.pdf Enterprise Income Verification (EIV) System, Security Procedures for Upfront Income Verification data http://www.hud.gov/offices/pih/programs/ph/rhiip/docs/eivsecguidepha.pdfhttps://www.hud.gov/sites/documents/EIVSE CGUIDEPHA.PDF Executive Order 11063 http://www.hud.gov/offices/fheo/FHLaws/EXO11063.cfm https://www.archives.gov/federalregister/codification/executive-order/11063 Federal Register http://www.access.gpo.gov/su_docs/aces/fr-cont.htmlhttps://www.federalregister.gov/ General Income and Rent Determination FAQs www.hud.gov/offices/pih/programs/ph/rhiip/faq_gird.cfm Housing Choice Voucher Program Guidebook (7420.10G), April 2001Updated Chapters www.hud.gov/offices/pih/programs/hcv/forms/guidebook.cfmhttps://www.hud.gov/program_offices/public_indian_housi ng/programs/hcv/guidebook HUD-50058 Instruction Booklet https://www.hud.gov/sites/documents/FORM50058INSTRUCTBOOKLET.PDF Joint Statement of the Department of Housing and Urban Development and the Department of Justice, issued May 17, 2004 http://www.hud.gov/offices/fheo/library/huddojstatement.pdf https://www.justice.gov/sites/default/files/crt/legacy/2010/12/14/joint_statement_ra.pdf Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons, published January 22, 2007 http://www.hud.gov/offices/fheo/promotingfh/FederalRegistepublishedguidance.pdf https://www.lep.gov/guidance/HUD_guidance_Jan07.pdf Notice PIH 2018-24, Verification of Social Security Numbers (SSNs) and Social Security (SS) and Supplemental Security Income (SSI) Benefits; and Effective Use of the Enterprise Income Verification (EIV) System’s Identity Verification Report https://www.hud.gov/sites/dfiles/PIH/documents/PIH-2018-24_EIV_SSN_Notice_FINAL.pdf Notice PIH 2010-26 (HA), Nondiscrimination and Accessibility Notice https://www.hud.gov/sites/documents/DOC_8993.PDF Notice PIH 2017-12, Administrative Guidance for Effective and Mandated Use of the Enterprise Income Verification (EIV) System https://www.hud.gov/sites/documents/PIH2017-12EIVNOTICE.PDF Notice PIH 2017-12, Administrative Guidance for Effective and Mandated Use of the Enterprise Income Verification (EIV) System https://www.hud.gov/sites/documents/PIH2017-12EIVNOTICE.PDF

- 28 - Notice PIH 2010-26 (HA), Nondiscrimination and Accessibility Notice http://www.hud.gov/offices/pih/publications/notices/10/pih2010-26.pdf OMB Circular A-133 http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2010 https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A133/a133.pdf Project-Based Voucher Program; Final Rule http://www.gpo.gov/fdsys/pkg/FR-2005-10-13/pdf/05-20035.pdf Rental Housing Integrity Improvement Program (RHIIP) Frequently Asked Questions. www.hud.gov/offices/pih/programs/ph/rhiip/faq.cfm VAWA Final Rule http://www.gpo.gov/fdsys/pkg/FR-2010-10-27/pdf/2010-26914.pdf Verification FAQ www.hud.gov/offices/pih/programs/ph/rhiip/faq_verif.cfm Verification Guidance, March 2004 (attachment to Notice PIH 2004-1) http://www.hud.gov/offices/pih/publications/notices/04/verifguidance.pdf The HUD Wweb site is https://www.hud.gov/. Guidebooks, handbooks and other HUD resources may be found at the HUDClips Wweb site: https://www.hud.gov/program_offices/administration/hudclips.

- 29 - 3-I.C. FAMILY BREAK-UP AND REMAINING MEMBER OF TENANT FAMILY Family Break-up [24 CFR 982.315; Notice PIH 2017-08] Except under the following conditions, the CDA has discretion to determine which members of an assisted family continue to receive assistance if the family breaks up: • If the family breakup results from an occurrence of domestic violence, dating violence, sexual assault or stalking, the CDA must ensure that the victim retains assistance. (For documentation requirements and policies related to domestic violence, dating violence, sexual assault and stalking, see section 16-IX.D of this plan.) • In accordance with Notice PIH 2017-08, for HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers, when the veteran is the perpetrator of domestic violence, dating violence, sexual assault, or stalking, the victim must continue to be assisted. Upon termination of the perpetrator's HUD- VASH voucher, the victim should be given a regular HCV if one is available, and the perpetrator's HUD-VASH voucher should be used to serve another eligible family. If a regular HCV is not available, the victim will continue to use the HUD-VASH voucher, which must be issued to another eligible family upon the voucher's turnover. • If a court determines the disposition of property between members of the assisted family, the CDA is bound by the court's determination of which family members continue to receive assistance. CDA Policy When a family on the waiting list breaks up into two or more otherwise eligible families, only one of the new families may retain the original application date. Other former family members may make a new application with a new application date if the waiting list is open. If a family breaks up into two or more otherwise eligible families while receiving assistance, only one of the new families will continue to be assisted. If one of the families has minor children, this family will retain assistance. If both families have minor children, the families will need to determine which will retain assistance. In the absence of a judicial decision, or an agreement among the original family members, the CDA will determine which family will retain their placement on the waiting list or will continue to receive assistance. When making its determination, the CDA will take into consideration the following factors: (1) the interest of any minor children, including custody arrangements; (2) the interest of any ill, elderly, or disabled family members; (3) the interest of any family member who is the victim of domestic violence, dating violence, sexual assault or stalking, including a family member who was forced to leave an assisted unit as a result of such actual or threatened abuse; (4) any possible risks to family members as a result of criminal activity; and (5) the recommendations of social service professionals working with the family. In a situation where the original family is not in agreement and there are no minor children, or both families have minor children, after the break-up, the CDA will use the factors above, to determine which family will receive continued assistance. Remaining Member of a Tenant Family [24 CFR 5.403] The HUD definition of family includes the remaining member of a tenant family, which is a member of an

- 30 - assisted family who remains in the unit when other members of the family have left the unit. Household members such as live-in aides, foster children, and foster adults do not qualify as remaining members of a family. If the remaining member of a tenant family has not been a part of the original household for at least 12 months, they are not eligible for continued assistance. The CDA may make an exception as a reasonable accommodation. If dependents are the only remaining members of a tenant family and there is no family member able to assume the responsibilities of the head of household, see Chapter 6, Section 6-I.B, for the policy on “Caretakers for a Child.”

PART II: BASIC ELIGIBILITY CRITERIA

3-II.A. INCOME ELIGIBILITY AND TARGETING

Income Limits HUD establishes income limits for all areas of the country and publishes them annually in the Federal Register. They are based upon estimates of median family income with adjustments for family size. The income limits are used to determine eligibility for the program and for income targeting purposes as discussed in this section. Definitions of the Income Limits [24 CFR 5.603(b)] Low-income family. A family whose annual income does not exceed 80 percent of the median income for the area, adjusted for family size. Very low-income family. A family whose annual income does not exceed 50 percent of the median income for the area, adjusted for family size. Extremely low-income family. A family whose annual income does not exceed the federal poverty level or 30 percent of the median income for the area, adjusted for family size. Area median income is determined by HUD, with adjustments for smaller and larger families. HUD may establish income ceilings higher or lower than 30, 50, or 80 percent of the median income for an area if HUD finds that such variations are necessary because of unusually high or low family incomes. Using Income Limits for Eligibility [24 CFR 982.201] Income limits are used for eligibility only at admission. Income eligibility is determined by comparing the annual income of an applicant to the applicable income limit for their family size. The calculation of annual income is a point-in-time. Changes, after the initial calculation, will not be considered for income eligibility purposes. In order to be income eligible, an applicant family must be one of the following: • A very low-income family • A low-income family that has been "continuously assisted" under the 1937 Housing Act. A family is continuously assisted if the family is already receiving assistance under any 1937 Housing Act program at the time the family is admitted to the HCV program [24 CFR 982.4]

- 31 - CDA Policy The CDA will consider a family to be continuously assisted if the family was leasing a unit under any 1937 Housing Act program at the time, they were selected from the CDA’s waiting list. • A low-income family that qualifies for voucher assistance as a non-purchasing household living in HOPE 1 (public housing homeownership), HOPE 2 (multifamily housing homeownership) developments, or other HUD-assisted multifamily homeownership programs covered by 24 CFR 248.173 • A low-income or moderate-income family that is displaced as a result of the prepayment of a mortgage or voluntary termination of a mortgage insurance contract on eligible low-income housing as defined in 24 CFR 248.101 HUD permits the CDA to establish additional categories of low-income families that may be determined eligible. The additional categories must be consistent with the CDA plan and the consolidated plans for local governments within the CDA’s jurisdiction. CDA Policy The CDA has not established any additional categories of eligible low-income families. Using Income Limits for Targeting [24 CFR 982.201] At least 75 percent of the families admitted to the CDA's program during a CDA fiscal year must be extremely low-income families. HUD may approve exceptions to this requirement if the CDA demonstrates that it has made all required efforts but has been unable to attract an adequate number of qualified extremely low-income families. Families continuously assisted under the 1937 Housing Act and families living in eligible low-income housing that are displaced as a result of prepayment of a mortgage or voluntary termination of a mortgage insurance contract are not counted for income targeting purposes.

PART III: DENIAL OF ASSISTANCE

3-III.A. OVERVIEW A family that does not meet the eligibility criteria discussed in Parts I and II, must be denied assistance. In this section we will discuss other situations and circumstances in which denial of assistance is mandatory for the CDA, and those in which denial of assistance is optional for the CDA.

While the regulations state that the CDA must prohibit admission for certain types of criminal activity and give the CDA the option to deny for other types of previous criminal history, more recent HUD rules and OGC guidance must also be taken into consideration when determining whether a particular individual’s criminal history merits denial of admission.

When considering any denial of admission, the CDA may not use arrest records as the basis for the denial. Further, HUD does not require the adoption of “One Strike” policies and reminds the CDA of their obligation to safeguard the due process rights of applicants and tenants [Notice PIH 2015-19].

- 32 - HUD’s Office of General Counsel issued a memo on April 4, 2016, regarding the application of Fair Housing Act standards to the use of criminal records. This memo states that a CDA violates the Fair Housing Act when their policy or practice has an unjustified discriminatory effect, even when the CDA had no intention to discriminate. Where a policy or practice that restricts admission based on criminal history has a disparate impact on a particular race, national origin, or other protected class, that policy or practice is in violation of the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the CDA, or if that interest could be served by another practice that has a less discriminatory effect [OGC Memo 4/4/16].

PHAs who impose blanket prohibitions on any person with any conviction record, no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then will be unable to show that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Even a PHA with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary. To do this, the PHA must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and property and criminal conduct that does not. Forms of Denial [24 CFR 982.552(a)(2); HCV GB, p. 5-35] Denial of assistance includes any of the following: • Not placing the family's name on the waiting list • Denying or withdrawing a voucher • Not approving a request for tenancy or refusing to enter into a HAP contract • Refusing to process a request for or to provide assistance under portability procedures

Prohibited Reasons for Denial of Program Assistance [24 CFR 982.202(b), 24 CFR 5.2005(b)] HUD rules prohibit denial of program assistance to the program based on any of the following criteria: • Race, color, sex, religion, familial status, age, disability, national origin, creed, sexual orientation, marital status, or receipt of public assistance. (See Chapter 2 for additional information about fair housing and equal opportunity requirements.) • Where a family lives prior to admission to the program • Where the family will live with assistance under the program. Although eligibility is not affected by where the family will live, there may be restrictions on the family's ability to move outside the CDA's jurisdiction under portability. (See Chapter 10, Portability.) • Whether members of the family are unwed parents, recipients of public assistance, or children born out of wedlock • Whether the family includes children • Whether a family decides to participate in a family self-sufficiency program • Whether or not a qualified applicant is or has been a victim of domestic violence, dating violence, sexual assault or stalking if the applicant is otherwise qualified for assistance. (See section 3-III.G.)

- 33 -

3-III.B. MANDATORY DENIAL OF ASSISTANCE [24 CFR 982.553(a)] HUD requires the CDA to deny assistance in the following cases: • Any member of the household has been evicted from federally assisted housing in the last three years for drug-related criminal activity. HUD permits, but does not require, the CDA to admit an otherwise-eligible family if the household member has completed a CDA-approved drug rehabilitation program or the circumstances which led to eviction no longer exist (e.g., the person involved in the criminal activity no longer lives in the household). CDA Policy The CDA will admit an otherwise-eligible family who was evicted from federally-assisted housing within the past three years for drug-related criminal activity, if the CDA is able to verify that the household member who engaged in the criminal activity is no longer living in the household. • The CDA determines that any household member is currently engaged in the use of illegal drugs. CDA Policy Currently engaged in is defined as any use of illegal drugs during the previous twelve months. • The CDA has reasonable cause to believe that any household member's current use or pattern of use of illegal drugs, or current abuse or pattern of abuse of alcohol, may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents. CDA Policy In determining reasonable cause, the CDA will consider all credible evidence, including but not limited to, any record of convictions, arrests, or evictions of household members related to the use of illegal drugs or the abuse of alcohol. A conviction will be given more weight than an arrest. A record, or records, of arrest will not be used as the sole basis of determining reasonable cause. The CDA will also consider evidence from treatment providers or community-based organizations providing services to household members. • Any household member has ever been convicted of drug-related criminal activity for the production or manufacture of methamphetamine on the premises of federally assisted housing. CDA Policy If any household member has ever been convicted of drug-related criminal activity for the production or manufacture of methamphetamine in any location, not just federally assisted housing, the family will be denied assistance. • Any household member is subject to a lifetime registration requirement under a state sex offender registration program.

3-III.C. OTHER PERMITTED REASONS FOR DENIAL OF ASSISTANCE HUD permits, but does not require, the CDA to deny assistance for the reasons discussed in this section. Criminal Activity [24 CFR 982.553]

- 34 - HUD permits, but does not require, the CDA to deny assistance if the CDA determines that any household member is currently engaged in, or has engaged in during a reasonable time before the family would receive assistance, certain types of criminal activity. CDA Policy A family will be denied assistance, if within the past five years, any household member is currently engaged in, or has engaged in any of the following criminal activities: Drug-related criminal activity, defined by HUD as the illegal manufacture, sale, distribution, or use of a drug, or the possession of a drug with intent to manufacture, sell, distribute or use the drug [24 CFR 5.100]; or Violent criminal activity, defined by HUD as any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage [24 CFR 5.100]. Criminal activity that may threaten the health or safety of property owners, management staff, and persons performing contract administration functions or other responsibilities on behalf of the CDA (including a CDA employee or a CDA contractor, subcontractor, or agent), the family will be denied assistance; or. A family will be denied assistance, if over a period of the most recent 10 years, a household member has a pattern of criminal activity, that may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents or persons residing in the immediate vicinity or cause damage to the property, the family will be denied assistance. (Immediate vicinity means within a half-mile radius of the premises.)

Evidence of such criminal activity includes, but is not limited to: • Any conviction for drug-related or violent criminal activity. • Any petty misdemeanor conviction will not be considered. • Any record of eviction from public or privately-owned housing as a result of criminal activity. In making its decision to deny assistance, the CDA will consider the factors discussed in Section 3- III.E. Upon consideration of such factors, the CDA may, on a case-by-case basis, decide not to deny assistance. Previous Behavior in Assisted Housing [24 CFR 982.552(c)] HUD authorizes the CDA to deny assistance based on the family’s previous behavior in assisted housing. Per the alternative requirements listed in the Federal Register notice dated December 29, 2014, the CDA is no longer permitted to deny assistance to a family because the family previously failed to meet its obligations under the Family Self-Sufficiency (FSS) program. [FR Notice 12/29/14].

- 35 - CDA Policy The CDA will deny assistance to an applicant family if: • The family does not provide information that the CDA or HUD determines is necessary in the administration of the program. • The family does not provide complete and true information to the CDA. • Any family member has been evicted from federally-assisted or CDA-owned housing in the last five years. • Any PHA has terminated HCV assistance for cause or the CDA has terminated assistance under a rental program for any member of the family in the past two years. • Any family member has committed fraud, bribery, or any other corrupt or criminal act in connection with any federal or CDA housing program. • The family owes rent or other amounts to any CDA in connection with Section 8 or other public housing assistance under the 1937 Act, unless the family repays the full amount of the debt prior to being selected from the waiting list. • If the family has not reimbursed any PHA for amounts the PHA paid to an owner under a HAP contract for rent, damages to the unit, or other amounts owed by the family under the lease, unless the family repays the full amount of the debt prior to being selected from the waiting list. • The family has breached the terms of a repayment agreement entered into with the CDA or another PHA, unless the family repays the full amount of the debt covered in the repayment agreement prior to being selected from the waiting list. • A family member has engaged in or threatened violent or abusive behavior toward CDA personnel. Abusive or violent behavior towards CDA personnel includes verbal as well as physical abuse or violence. Use of racial epithets, or other language, written or oral, that is customarily used to intimidate may be considered abusive or violent behavior. Threatening refers to oral or written threats or physical gestures that communicate intent to abuse or commit violence. In making its decision to deny assistance, the CDA will consider the factors discussed in Section 3-III.E. Upon consideration of such factors, the CDA may, on a case-by-case basis, decide not to deny assistance.

3-III.E. CRITERIA FOR DECIDING TO DENY ASSISTANCE Evidence [24 CFR 982.553(c)] CDA Policy The CDA will use the concept of the preponderance of the evidence as the standard for making all admission decisions. Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a

- 36 - whole show that the fact sought to be proved is more probable than not. Preponderance of the evidence may not be determined by the number of witnesses, but by the greater weight of all evidence. Consideration of Circumstances [24 CFR 982.552(c)(2)] HUD authorizes the CDA to consider all relevant circumstances when deciding whether to deny assistance based on a family’s past history except in the situations for which denial of assistance is mandatory (see Section 3-III.B). CDA Policy The CDA will consider the following facts and circumstances prior to making its decision: • The seriousness of the case, especially with respect to how it would affect other residents’ safety or property • The effects that denial of assistance may have on other members of the family who were not involved in the action or failure to act • The extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities, or (as discussed further in section 3-III.G) a victim of domestic violence, dating violence, sexual assault or stalking • The length of time since the violation occurred, including the age of the individual at the time of the conduct, as well as the family’s recent history and the likelihood of favorable conduct in the future • While a record, or records, of arrest(s) will not be used as the sole basis for denial, an arrest may, however, trigger an investigation to determine whether the applicant actually engaged in disqualifying criminal activity. As part of its investigation, the CDA may obtain the police report associated with the arrest and consider the reported circumstances of the arrest. The CDA may also consider:

o Any statements made by witnesses or the applicants not included in the policy report o Whether criminal charges were filed o Whether, if filed, criminal charges were abandoned, dismissed, not prosecuted, or ultimately resulted in an acquittal

o Any other evidence relevant to determining whether or not the applicant engaged in disqualifying activity Evidence of criminal conduct will be considered if it indicates a demonstrable risk to safety and/or property. • In the case of drug or alcohol abuse, whether the culpable household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program or has otherwise been rehabilitated successfully • The CDA will require the applicant to submit evidence of the household member’s current participation in or successful completion of a supervised drug or alcohol rehabilitation program, or evidence of otherwise having been rehabilitated successfully. Successful

- 37 - rehabilitation is defined as being drug and/or alcohol free for a period of 12 months. Removal of a Family Member's Name from the Application Should the CDA’s screening process reveal that an applicant’s household includes an individual subject to state lifetime registered sex offender registration, the CDA must offer the family the opportunity to remove the ineligible family member from the household. If the family is unwilling to remove that individual from the household, the CDA must deny admission to the family [24 CFR 982.552(c)(2)(ii)]. CDA Policy As a condition of receiving assistance, a family may agree to remove the culpable family member from the application. In such instances, the head of household must certify that the family member will not be permitted to visit, stay as a guest, or reside in the assisted unit. After admission to the program, the family must present evidence of the former family member’s current address upon CDA request. Reasonable Accommodation [24 CFR 982.552(c)(2)(iv)] If the family includes a person with disabilities, the CDA’s decision concerning denial of admission is subject to consideration of reasonable accommodation in accordance with 24 CFR Part 8. CDA Policy If the family indicates that the behavior of a family member with a disability is the reason for the proposed denial of assistance, the CDA will determine whether the behavior is related to the stated disability. If so, upon the family’s request, the CDA will determine whether admitting the family as a reasonable accommodation is appropriate. The CDA will only consider accommodations that can reasonably be expected to address the behavior that is the basis of the proposed denial of assistance. See Chapter 2 for a discussion of reasonable accommodation. 4-II.F. UPDATING THE WAITING LIST [24 CFR 982.204] HUD requires the CDA to establish policies to use when removing applicant names from the waiting list. Purging the Waiting List The decision to withdraw an applicant family that includes a person with disabilities from the waiting list is subject to reasonable accommodation. If the applicant did not respond to a CDA request for information or updates, and the CDA determines that the family did not respond because of the family member’s disability, the CDA must reinstate the applicant family to their former position on the waiting list [24 CFR 982.204(c)(2)]. CDA Policy The waiting list will be updated annuallyas needed to ensure that all applicants and applicant information is current and timely. To update the waiting list, the CDA will send a notice via first class mail to each family on the waiting list to determine whether the family continues to be interested in the program. This notice will be sent to the last address that the CDA has on record for the family. If the family fails to respond within 15 business days, the family will be removed from all waiting lists administered by the Housing Assistance Department without further notice.

- 38 - If the notice is returned by the post office with no forwarding address, the applicant will be removed from all waiting lists administered by the Housing Assistance Department without further notice. • If the family contacts the CDA within 60 days of removal, the family will be placed back on the waiting list(s). • If the notice is returned by the post office with a forwarding address, the notice will be re- sent to the address indicated. The family will have 15 business days to respond from the date the letter was re-sent. • If the family is removed from the waiting list for failure to respond, the CDA may reinstate if it is determined it was due to CDA error. Removal from the Waiting List CDA Policy • If at any time an applicant family is on the waiting list, the CDA determines that the family is not eligible for assistance (see Chapter 3); the family will be removed from the waiting list. • If at any time an applicant family requests that their name be removed from the waiting list, the family will be removed from the waiting list. • If a family is removed from the waiting list because the CDA has determined the family is not eligible for assistance, or has failed to comply with a request for information, as it relates to preference or other eligibility components, a notice will be sent to the family’s address of record as well as to any alternate address provided on the initial application. If the notice is returned by the post office, with no forwarding address, the applicant will be removed from all waiting lists, administered by the Housing Assistance Department, without further notice.

o The notice will state the reasons the family was removed from the waiting list and will inform the family how to request an informal review regarding the CDA’s decision (see Chapter 16) [24 CFR 982.201(f)]. 4-III.C. SELECTION METHOD The CDA must describe the method for selecting applicant families from the waiting list, including the system of admission preferences that the CDA will use [24 CFR 982.202(d)]. Local Preferences [24 CFR 982.207; HCV p. 4-16] The CDA is permitted to establish local preferences, and to give priority to serving families that meet those criteria. HUD specifically authorizes and places restrictions on certain types of local preferences. HUD also permits the CDA to establish other local preferences, at its discretion. Any local preferences established must be consistent with the CDA plan and the consolidated plan and must be based on local housing needs and priorities that can be documented by generally accepted data sources. CDA Policy The CDA has adopted the following category of preferences:

- 39 - INSUFFICIENT FUNDING (430 POINTS) The CDA will offer a preference to any family that has been terminated or is at imminent risk of being terminated from the following programs due to insufficient funding: • CDA administered Housing Choice Voucher • CDA administered Bridges • CDA administered Continuum of Care • CDA administered Levy Rental Assistance Program • CDA administered Housing Trust Fund Programs (including Long Term Homeless and Re- Entry Assistance Grant) INVOLUNTARY DISPLACEMENT (320 POINTS) The CDA will offer a preference to any family residing in Dakota County that has been involuntarily displaced due to: • fire, flood or tornado • A natural disaster or otherwise formally recognized pursuant to Federal disaster relief laws • Federal, state or local government action related to code enforcement, public improvement or redevelopment LOCAL HOUSING NEED (320 POINTS) The CDA will offer a preference to any family residing in Dakota County, receiving rental assistance from Dakota County Supportive Housing Unit’s administered Continuum of Care program, when their assistance is ending due to the mandatory 24-month participation maximum (limited to 24 families admitted per calendar year). PUBLIC HOUSING DISPLACEMENT (320 POINTS) The CDA will offer a preference to families residing in CDA Public Housing who are required to move and cannot be placed in another public housing unit. This preference is not available to families being evicted from a public housing unit.

VERIFIED RESIDENCY PREFERENCE (215 POINT) The CDA will offer a preference to any family who are Dakota County residents or have community roots. [24 CFR 100.80] Community roots is defined as applicants who live, or whose head-of-household, spouse, or co-head work in Dakota County, have been hired to work in Dakota County, or attend school full-time in Dakota County. (The employer must be located within Dakota County.) • The CDA will required one of the following to establish a residency preference:

o Copy of lease o Paystub, including the name and address of the applicant and employer o Statement from an educational institution, including enrollment dates and status (part-time or full-time)

- 40 - o Verification from Dakota County Employment and Economic Assistance, including assistance dates and type of assistance received (MFIP, General Assistance, SNAP, etc.)

o Copy of natural gas, electric, water/sewer, or garbage bill with the applicant’s name and address. • Full-time student is defined as a person who is carrying a subject load that is considered full time for day students under the standards and practices of the educational institution attended. An education institution includes a vocational school with a diploma or certificate program, as well as an institution offering a college degree.

FUP AND VASH REFERRAL PREFERENCE (10 POINTS) When a voucher is available, the CDA will accept referrals from the following entities: • FUP: Dakota County Child Protection • VASH: Veterans Administration Housing unit

MAINSTREAM REFERRAL PREFERENCE (5 POINTS) When a voucher is available, the CDA will offer preference to a household that consists of, at least one, non-elderly (ages 18-62) adult with disabilities. For a non-elderly adult with disabilities to receive preference on the waiting list they must meet one of the following criteria: • Transitioning out of institutional or segregated settings, or; • At serious risk of institutionalization due to a public entity’s failure to provide community services or its cuts to services will likely cause a decline in health, safety or welfare that would lead to the individual’s eventual placement in an institution, or; • Homeless or will imminently lose their primary residence, or; • Fleeing, or attempting to flee, domestic violence, dating violence, sexual assault, stalking, or other dangerous or life-threatening conditions that relate to violence against an individual, or a family member, that has either taken place within the primary residence or has made the individual afraid to return to the primary residence. The person must have no other residence or lack the resources or support networks to obtain permanent housing, or; • In permanent housing or rapid rehousing projects who no longer need the level of services provided.

RESIDENCY PREFERENCE (1 POINT) The CDA will offer a preference point to any family who, during the application process, certify that they are Dakota County residents or have community roots. [24 CFR 100.80] Community roots is defined as applicants who live, or whose head-of-household, spouse, or co-head work in Dakota County, have been hired to work in Dakota County, or attend school full-time in Dakota County. (The employer must be located within Dakota County.)

- 41 - Income Targeting Requirement [24 CFR 982.201(b)(2)] HUD requires that extremely low-income (ELI) families make up at least 75 percent of the families admitted to the HCV program during the CDA’s fiscal year. ELI families are those with annual incomes at or below the federal poverty level or 30 percent of the area median income, whichever number is higher. To ensure this requirement is met, the CDA may skip non-ELI families on the waiting list in order to select an ELI family. Low-income families admitted to the program that are “continuously assisted” under the 1937 Housing Act [24 CFR 982.4(b)], as well as low-income or moderate-income families admitted to the program that are displaced as a result of the prepayment of the mortgage or voluntary termination of an insurance contract on eligible low-income housing, are not counted for income targeting purposes [24 CFR 982.201(b)(2)(v)]. CDA Policy The CDA will monitor progress in meeting the income targeting requirement throughout each fiscal year. Extremely low-income families will be selected ahead of other eligible families on an as-needed basis to ensure the income targeting requirement is met. Order of Selection The CDA system of preferences may select families based on local preferences according to the date and time of application, or by a random selection process (lottery) [24 CFR 982.207(c)]. If the CDA does not have enough funding to assist the family at the top of the waiting list, it is permitted to skip down the waiting list to a family that it can afford to subsidize when there are not sufficient funds to subsidize the family at the top of the waiting list [24 CFR 982.204(d) and (e)]. CDA Policy • Families will be selected from the waiting list based on the targeted funding or selection preference(s) for which they qualify, and in accordance with the CDA’s hierarchy of preferences. • Within each targeted funding or preference category, families will be selected by position determined by lottery or on a first-come, first-served basis according to the date and time their complete application is received by the CDA. When the CDA’s waiting list is open, and waiting list selections are needed, 95% of will be preference applicants and 5% non- preference. • Documentation will be maintained by the CDA as to whether families on the list qualify for and are interested in targeted funding. If a higher placed family on the waiting list is not qualified or not interested in targeted funding, there will be a notation maintained so that the CDA does not have to ask higher placed families each time targeted selections are made. 4-III.E. THE APPLICATION INTERVIEW HUD recommends that the CDA obtain the information and documentation needed to make an eligibility determination through a face-to-face interview with a CDA representative [HCV GB, pg. 4-16]. Being invited to attend an interview does not constitute admission to the program.

- 42 - Assistance cannot be provided to the family until all SSN documentation requirements are met. However, if the CDA determines that an applicant family is otherwise eligible to participate in the program, the family may retain its place on the waiting list for a period of time determined by the CDA [Notice PIH 2018-24]. Reasonable accommodation must be made for persons with disabilities who are unable to attend an interview due to their disability. CDA Policy • Families selected from the waiting list are required to participate in an eligibility interview; all adult members are required to attend the interview. • The head of household or spouse/co-head must provide acceptable documentation of legal identity. (Chapter 7 provides a discussion of proper documentation of legal identity).

o If the family representative does not provide the required documentation, at the time of the interview, he or she will be required to provide it within 10 business days.

o Pending disclosure and documentation of social security numbers, the CDA will allow the family to retain its place on the waiting list for 90 days. . If not, all household members have disclosed their SSNs by that time, the CDA will deny assistance and remove the family’s name from the waiting list. • The family must provide the information necessary to establish the family’s eligibility and determine the appropriate level of assistance, as well asand must completinge required forms, provideing required signatures, and submitting required documentation. If any materials are missing, the CDA will provide the family with a written list of items that must be submitted. • Any required documents or information that the family is unable to provide at the interview must be provided within 10 business days of the interview (Chapter 7 provides details about longer submission deadlines for particular items, including documentation of eligible noncitizen status).

o If the family is unable to obtain the information or materials within the required time frame, the family may request an extension.

o If the required documents and information are not provided within the required time frame (plus any extensions), the family will be sent a notice of denial (See Chapter 3). • An advocate, interpreter, or other assistant may assist the family with the application and the interview process. • Interviews will be conducted in English. For limited English proficient (LEP) applicants, the CDA will provide translation services in accordance with the CDA’s LEP plan. (See Exhibit 2-2.) • If the family is unable to attend a scheduled interview, the family should contact the CDA

- 43 - in advance of the interview to schedule a new appointment. • In all circumstances, if a family does not attend the first scheduled interview, the family will be denied assistance based on the family’s failure to supply information needed to determine eligibility. A notice of denial will be issued in accordance with policies contained in Chapter 3. If a family contacts the CDA within 60 days of removal for failure to attend the initial appointment, they will be rescheduled for a second and final appointment. Failure to attend the second and final appointment will result in the family’s name being permanently removed from waiting list. Expiration of Voucher Term Once a family’s housing choice voucher term (including any extensions) expires, the family is no longer eligible to search for housing under the program. If the family still wishes to receive assistance, the CDA may require that the family reapply, or may place the family on the waiting list with a new application date but without requiring reapplication. Such a family does not become ineligible for the program on the grounds that it was unable to locate a unit before the voucher expired [HCV GB p. 8-13]. CDA Policy If an applicant family’s voucher term or extension expires before the CDA has approved a tenancy, the CDA will require the family to reapply for assistance. Within 10 business days after the expiration of the voucher term or any extension, the CDA will notify the family in writing that the voucher term has expired and that the family must reapply, when the waiting list is open, in order to be placed on the waiting list. 6-I.E. EARNED INCOME DISALLOWANCE FOR PERSONS WITH DISABILITIES [24 CFR 5.617; Streamlining Final Rule (SFR) Federal Register 3/8/16] The earned income disallowance (EID) encourages people with disabilities to enter the work force by not including the full value of increases in earned income for a period of time. The full text of 24 CFR 5.617 is included as Exhibit 6-4 at the end of this chapter. Eligibility criteria and limitations on the disallowance are summarized below. Eligibility This disallowance applies only to individuals in families already participating in the HCV program (not at initial examination). To qualify, the family must experience an increase in annual income that is the result of one of the following events: • Employment of a family member who is a person with disabilities and who was previously unemployed for one or more years prior to employment. Previously unemployed includes a person who annually has earned not more than the minimum wage applicable to the community multiplied by 500 hours. The applicable minimum wage is the federal minimum wage unless there is a higher state or local minimum wage. • Increased earnings by a family member who is a person with disabilities and whose earnings increase during participation in an economic self-sufficiency or job-training program. A self-sufficiency program includes a program designed to encourage, assist, train, or facilitate the economic independence of HUD-assisted families or to provide work to such families [24 CFR 5.603(b)].

- 44 - • New employment or increased earnings by a family member who is a person with disabilities and who has received benefits or services under Temporary Assistance for Needy Families (TANF) or any other state program funded under Part A of Title IV of the Social Security Act within the past six months. If the benefits are received in the form of monthly maintenance, there is no minimum amount. If the benefits or services are received in a form other than monthly maintenance, such as one-time payments, wage subsidies, or transportation assistance, the total amount received over the six-month period must be at least $500. Calculation of the Disallowance Calculation of the earned income disallowance for an eligible member of a qualified family begins with a comparison of the member’s current income with his or her “baseline income.” The family member’s baseline income is his or her income immediately prior to qualifying for the EID. The family member’s baseline income remains constant throughout the period that he or she is participating in the EID. While qualification for the disallowance is the same for all families, calculation of the disallowance will differ depending on when the family member qualified for the EID. Participants qualifying prior to May 9, 2016, will have the disallowance calculated under the “Original Calculation Method” described below which requires a maximum lifetime disallowance period of up to 48 consecutive months. Participants qualifying on or after May 9, 2016 will be subject to the “Revised Calculation Method” which shortens the lifetime disallowance period to 24 consecutive months. Under both the original and new methods, the EID eligibility criteria, the benefit amount, the single lifetime eligibility requirement and the ability of the applicable family member to stop and restart employment during the eligibility period are the same. Original Calculation Method Initial 12-Month Exclusion During the initial 12-month exclusion period, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded. The 12 months are cumulative and need not be consecutive. CDA Policy The initial EID exclusion period will begin on the first of the month following the date an eligible member of a qualified family is first employed or first experiences an increase in earnings. Second 12-Month Exclusion and Phase-In During the second 12-month exclusion period, the exclusion is reduced to half (50 percent) of any increase in income attributable to employment or increased earnings. The 12 months are cumulative and need not be consecutive. Lifetime Limitation The EID has a four-year (48-month) lifetime maximum. The four-year eligibility period begins at the same time that the initial exclusion period begins and ends 48 months later. The one-time eligibility for the EID applies even if the eligible individual begins to receive assistance from another housing agency, if the individual moves between public housing and Section 8 assistance, or if there are breaks in assistance. CDA Policy During the 48-month eligibility period, the CDA will schedule and conduct an interim

- 45 - reexamination each time there is a change in the family member’s annual income that affects or is affected by the EID (e.g., when the family member’s income falls to a level at or below his/her prequalifying income, when one of the exclusion periods ends, and at the end of the lifetime maximum eligibility period). Revised Calculation Method Initial 12-Month Exclusion During the initial exclusion period of 12 consecutive months, the full amount (100 percent) of any increase in income attributable to new employment or increased earnings is excluded. CDA Policy The initial EID exclusion period will begin on the first of the month following the date an eligible member of a qualified family is first employed or first experiences an increase in earnings. Second 12-Month Exclusion During the second exclusion period of 12 consecutive months, the CDA must exclude at least 50 percent of any increase in income attributable to employment or increased earnings. CDA Policy During the second 12-month exclusion period, the CDA will exclude 50 percent of any increase in income attributable to new employment or increased earnings. Lifetime Limitation The EID has a two-year (24-month) lifetime maximum. The two-year eligibility period begins at the same time that the initial exclusions period begins and ends 24 months later. During the 24-month period, an individual remains eligible for EID even if they begin to receive assistance from a different housing agency, move between public housing and housing choice voucher assistance, or have breaks in assistance. 6-I.G. ASSETS [24 CFR 5.609(b)(3); 24 CFR 5.603(b)] Overview There is no asset limitation for participation in the HCV program. However, HUD requires that the CDA include in annual income the anticipated “interest, dividends, and other net income of any kind from real or personal property” [24 CFR 5.609(b)(3)]. This section discusses how the income from various types of assets is determined. For most types of assets, the CDA must determine the value of the asset in order to compute income from the asset. Therefore, for each asset type, this section discusses: • How the value of the asset will be determined • How income from the asset will be calculated Exhibit 6-1 provides the regulatory requirements for calculating income from assets [24 CFR 5.609(b)(3)], and Exhibit 6-3 provides the regulatory definition of net family assets. This section begins with a discussion of general policies related to assets and then provides HUD rules and CDA policies related to each type of asset. Optional policies for family self-certification of assets are found in Chapter 7.

- 46 - General Policies Income from Assets The CDA generally will use current circumstances to determine both the value of an asset and the anticipated income from the asset. As is true for all sources of income, HUD authorizes the CDA to use other than current circumstances to anticipate income when (1) an imminent change in circumstances is expected (2) it is not feasible to anticipate a level of income over 12 months or (3) the CDA believes that past income is the best indicator of anticipated income. For example, if a family member owns real property that typically receives rental income but the property is currently vacant, the CDA can take into consideration past rental income along with the prospects of obtaining a new tenant. CDA Policy Anytime current circumstances are not used to determine asset income, a clear rationale for the decision will be documented in the file. In such cases the family may present information and documentation to the CDA to show why the asset income determination does not represent the family’s anticipated asset income. Valuing Assets The calculation of asset income sometimes requires the CDA to make a distinction between an asset’s market value and its cash value. • The market value of an asset is its worth in the market (e.g., the amount a buyer would pay for real estate or the total value of an investment account). • The cash value of an asset is its market value less all reasonable amounts that would be incurred when converting the asset to cash. CDA Policy Reasonable costs that would be incurred when disposing of an asset include, but are not limited to, penalties for premature withdrawal, broker and legal fees, and settlement costs incurred in real estate transactions [HCV GB, p. 5-28]. Lump-Sum Receipts Payments that are received in a single lump sum, such as inheritances, capital gains, lottery winnings, insurance settlements, and proceeds from the sale of property, are generally considered assets, not income. However, such lump-sum receipts are counted as assets only if they are retained by a family in a form recognizable as an asset (e.g., deposited in a savings or checking account) [RHIIP FAQs]. (For a discussion of lump-sum payments that represent the delayed start of a periodic payment, most of which are counted as income, see sections 6-I.H and 6-I.I.) Imputing Income from Assets [24 CFR 5.609(b)(3), Notice PIH 2012-29] When net family assets are $5,000 or less, the CDA will include in annual income the actual income anticipated to be derived from the assets. When the family has net family assets in excess of $5,000, the CDA will include in annual income the greater of (1) the actual income derived from the assets or (2) the imputed income. Imputed income from assets is calculated by multiplying the total cash value of all family assets by an average passbook savings rate as determined by the CDA.

- 47 - • Note: The HUD field office no longer provides an interest rate for imputed asset income. The “safe harbor” is now for the CDA to establish a passbook rate within 0.75 percent of a national average. • The CDA must review its passbook rate annually to ensure that it remains within 0.75 percent of the national average. CDA Policy The CDA will initially set the imputed asset passbook rate at the national rate established by the Federal Deposit Insurance Corporation (FDIC). The CDA will review the passbook rate annually, in December of each year. The rate will not be adjusted unless the current CDA rate is no longer within 0.75 percent of the national rate. If it is no longer within 0.75 percent of the national rate, the passbook rate will be set at the current national rate. The effective date of cChanges to the passbook rate will take effect on February 1 following the December be determined at the time of the review. Equity in Real Property or Other Capital Investments Equity (cash value) in a property or other capital asset is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset [HCV GB, p. 5-25]. CDA Policy In determining the equity, the CDA will determine market value by examining recent sales of at least three properties in the surrounding or similar neighborhood that possess comparable factors that affect market value. The CDA will first use the payoff amount for the loan (mortgage) as the unpaid balance to calculate equity. If the payoff amount is not available, the CDA will use the basic loan balance information to deduct from the market value in the equity calculation. Equity in real property and other capital investments is considered in the calculation of asset income except for the following types of assets: • Equity accounts in HUD homeownership programs [24 CFR5.603(b)] • The value of a home currently being purchased with assistance under the HCV program Homeownership Option for the first 10 years after the purchase date of the home [24 CFR 5.603(b), Notice PIH 2012-3] • Equity in owner-occupied cooperatives and manufactured homes in which the family lives [HCV GB, p. 5-25] • Equity in real property when a family member’s main occupation is real estate [HCV GB, p. 5-25]. This real estate is considered a business asset, and income related to this asset will be calculated as described in section 6-I.F. • Interests in Indian Trust lands [24 CFR 5.603(b)]

- 48 - • Real property and capital assets that are part of an active business or farming operation [HCV GB, p. 5-25] The CDA must also deduct from the equity the reasonable costs for converting the asset to cash. Using the formula for calculating equity specified above, the net cash value of real property is the market value minus the balance of the loan (mortgage) minus the expenses to convert to cash [Notice PIH 2012- 3]. CDA Policy For the purposes of calculating expenses to convert to cash for real property, the CDA will use ten percent of the market value of the home. A family may have real property as an asset in two ways: (1) owning the property itself and (2) holding a mortgage or deed of trust on the property. In the case of a property owned by a family member, the anticipated asset income generally will be in the form of rent or other payment for the use of the property. If the property generates no income, actual anticipated income from the asset will be zero. In the case of a mortgage or deed of trust held by a family member, the outstanding balance (unpaid principal) is the cash value of the asset. The interest portion only of payments made to the family in accordance with the terms of the mortgage or deed of trust is counted as anticipated asset income. CDA Policy In the case of capital investments owned jointly with others not living in a family’s unit, a prorated share of the property’s cash value will be counted as an asset unless the CDA determines that the family receives no income from the property and is unable to sell or otherwise convert the asset to cash. 6-I.K. PERIODIC AND DETERMINABLE ALLOWANCES [24 CFR 5.609(b)(7)] Annual income includes periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing with an assisted family. Alimony and Child Support The CDA must count alimony or child support amounts awarded as part of a divorce or separation agreement. CDA Policy The CDA will count court-awarded amounts for alimony and child support unless the CDA verifies that: (1) the payments are not being made, and (2) the family has made reasonable efforts to collect amounts due, including filing with courts or agencies responsible for enforcing payments [HCV GB, pp. 5-23 and 5-47]. The CDA considers historical patterns to be the best indicator of future income from alimony and child support; therefore, the CDA will anticipate child support income based on the payments received in the last 12 months unless documentation is provided by the family showing a permanent change in status (i.e. the death of the supporter or termination of the payment obligation). Families who do not have court-awarded alimony and child support awards are not required to seek a court award and are not required to take independent legal action to obtain collection.

- 49 - Regular Contributions or Gifts The CDA must count as income regular monetary and nonmonetary contributions or gifts from persons not residing with an assisted family [24 CFR 5.609(b)(7)]. Temporary, nonrecurring, or sporadic income and gifts are not counted [24 CFR 5.609(c)(9)]. CDA Policy Examples of regular contributions include: (1) regular payment of a family’s bills (e.g., utilities, telephone, rent, credit cards, and car payments), (2) cash or other liquid assets provided to any family member on a regular basis, and (3) “in-kind” contributions such as groceries and clothing provided to a family on a regular basis. When the CDA is informed that a household will be receiving a regular distribution of income in order for a unit to be affordable, this income will be included for a minimum of 12 months, to ensure this is not program manipulation. Nonmonetary contributions will be valued at the cost of purchasing the items, as determined by the CDA. For contributions that may vary from month to month (e.g., utility payments), the CDA will include an average amount based upon past historyhistory.

On November 8, 2016, the CDA received the following guidance from the local HUD field office regarding regular contributions and gifts.

In the case where someone (not living in the household) provides medical or dental coverage through their HMO at work, for a household member, and the HMO money is taken out of their paycheck directly, HUD agrees that this should not be included in the income calculation based on the following regulation: 6-II.D. MEDICAL EXPENSES DEDUCTION [24 CFR 5.611(a)(3)(i)] Unreimbursed medical expenses may be deducted to the extent that, in combination with any disability assistance expenses, they exceed three percent of annual income. The medical expense deduction is permitted only for families in which the head, spouse, or co-head is at least 62 or is a person with disabilities. If a family is eligible for a medical expense deduction, the medical expenses of all family members are counted [VG, p. 28]. Definition of Medical Expenses HUD regulations define medical expenses at 24 CFR 5.603(b) to mean “medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance.” CDA Policy The most current IRS Publication 502, Medical and Dental Expenses, will be used as a reference to determine the costs that qualify as medical expenses. Summary of Allowable Medical Expenses from IRS Publication 502 Services of medical professionals Psychiatric treatment

- 50 - Surgery and medical procedures that are Ambulance services and some costs of necessary, legal, noncosmetic transportation related to medical Services of medical facilities expenses Hospitalization, long-term care, and in- The cost and care of necessary home nursing services equipment related to a medical condition (e.g., eyeglasses/lenses, Prescription medicines and insulin, but hearing aids, crutches, and artificial not nonprescription medicines even if teeth) recommended by a doctor Cost and continuing care of necessary Improvements to housing directly related service animals to medical needs (e.g., ramps for a wheel chair, handrails) Medical insurance premiums or the cost of a health maintenance organization Substance abuse treatment programs (HMO)

Note: This chart provides a summary of eligible medical expenses only and final determination of medical expense deductions will be made after review of the current IRC Publication 502. Detailed information is provided in IRS Publication 502. Medical expenses are considered only to the extent they are not reimbursed by insurance or some other source.

6-II.F. CHILD CARE EXPENSE DEDUCTION HUD defines child care expenses at 24 CFR 5.603(b) as “amounts anticipated to be paid by the family for the care of children under 13 years of age during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income.” Necessary and Reasonable Costs Childcare expenses will be considered necessary if: (1) a family adequately explains how the care enables a family member to work, actively seek employment, or further his or her education, and (2) the family and childcare provider certify that the expenses are not paid or reimbursed by any other source. CDA Policy Childcare expenses will be considered for the time required for the eligible activity plus reasonable transportation time. For childcare that enables a family member to go to school, the time allowed may include not more than one study hour for each hour spent in class. To establish the reasonableness of childcare costs, the CDA will use the schedule of childcare costs from a qualified local entity that either subsidizes childcare costs, or licenses childcare providersthe local welfare agency. Families may present, and the CDA will consider, justification for costs that exceed typical costs in the area.

- 51 - 7-I.D. THIRD-PARTY WRITTEN AND ORAL VERIFICATION HUD’s current verification hierarchy defines two types of written third-party verification. The more preferable form, “written third-party verification,” consists of an original document generated by a third-party source, which may be received directly from a third-party source or provided to the CDA by the family. If written third-party verification is not available, the CDA must attempt to obtain a “written third-party verification form.” This is a standardized form used to collect information from a third party. Written Third-Party Verification [Notice PIH 2018-18] Written third-party verification documents must be original and authentic and may be supplied by the family or received from a third-party source. Examples of acceptable tenant-provided documents include, but are not limited to: pay stubs, payroll summary reports, employer notice or letters of hire and termination, SSA benefit verification letters, bank statements, child support payment stubs, welfare benefit letters and/or printouts, and unemployment monetary benefit notices. For wages other than tips, if the CDA knows the start date of employment, the year-to-date earnings will be used to calculate the projected annual income. The family must provide one original pay stub, dated within 30 days of the date it is provided to the CDA. If the CDA determines that it cannot accurately calculate the projected annual income, the CDA may request that the family provide originals of the three most current, consecutive pay stubs (i.e. employment wages that are sporadic, seasonal, or status change from part time-full time etc.). The CDA may reject documentation provided by the family if the document is not an original, if the document appears to be forged, or if the document is altered, mutilated, or illegible. CDA Policy • Third-party documents provided by the family must be dated within 60 calendar days of the CDA request date. • If the CDA determines that third-party documents provided by the family are not acceptable, the CDA will explain the reason to the family and request additional documentation. • As verification of earned income, the CDA will require the family to provide, one to three of the most current pay stub(s). At the CDA’s discretion, if additional paystubs are needed due to the family’s circumstances (e.g., sporadic income, fluctuating schedule, etc.), the CDA may request additional paystubs or a payroll record. 7-III.J. STUDENT FINANCIAL ASSISTANCE [Notice PIH 2015-21] Any financial assistance, in excess of amounts received for tuition, fees, and other required charges that a person attending an institution of higher education receives under the Higher Education Act of 1965, from private sources, or from an institution of higher education must be considered income unless the student is over the age of 23 with dependent children or is residing with parents who are seeking or receiving HCV assistance [24 CFR 5.609(b)(9) and FR 4/10/06]. For students over the age of 23 with dependent children or students residing with parents who are seeking or receiving HCV assistance, the full amount of student financial assistance is excluded from

- 52 - annual income [24 CFR 5.609(c)(6)]. The full amount of student financial assistance is also excluded for students attending schools that do not qualify as institutions of higher education (as defined in Exhibit 3- 2). Excluded amounts are verified only if, without verification, the CDA would not be able to determine whether or to what extent the income is to be excluded (see Section 7-III.H). CDA Policy For a student subject to having a portion of his/her student financial assistance included in annual income in accordance with 24 CFR 5.609(b)(9), the CDA will request written third-party verification of both the source and the amount. Family-provided documents from the educational institution attended by the student will be requested, as well as documents generated by any other person or entity providing such assistance, as reported by the student. In addition, the CDA will request written verification of the student’s tuition, fees, and other required charges amount. If the CDA is unable to obtain third-party written verification of the requested information, the CDA will pursue other forms of verification following the verification hierarchy in Section 7-I.B. 7-III.K. PARENTAL INCOME FOR STUDENTS SUBJECT TO ELIGIBILITY RESTRICTIONS If a student enrolled at an institution of higher education is under the age of 24, is not a veteran, is not married, does not have a dependent child, and is not a person with disabilities receiving HCV assistance as of November 30, 2005, the income of the student’s parents must be considered when determining income eligibility, unless the student is determined independent from his or her parents or a vulnerable youth in accordance with CDA policy [24 CFR 5.612, FR Notice 4/10/06, p. 18146, and FR Notice 9/21/16]. This provision does not apply to students residing with parents who are seeking or receiving HCV assistance. It is limited to students who are seeking or receiving assistance on their own, separately from their parents. CDA Policy If the CDA is required to determine the income eligibility of a student’s parents, the CDA will request an income declaration and certification of income from the appropriate parent(s) (as determined in Section 3-II.E). The CDA will send the request directly to the parents, who will be required to certify to their income under penalty of perjury. The parents will be required to submit the information directly to the CDA. The required information must be submitted (postmarked) within 10 business days of the date of the CDA’s request or within any extended timeframe approved by the CDA. The CDA reserves the right to request and review supporting documentation at any time if it questions the declaration or certification. Supporting documentation may include, but is not limited to, Internal Revenue Service (IRS) tax returns, consecutive and original pay stubs, bank statements, pension benefit statements, benefit award letters, and other official and authentic documents from a federal, state, or local agency.

- 53 - PART IV: VERIFYING MANDATORY DEDUCTIONS

7-IV.B. MEDICAL EXPENSE DEDUCTION Policies related to medical expenses are found in 6-II.D. The amount of the deduction will be verified following the standard verification procedures described in Part I. Amount of Expense CDA Policy Medical expenses will be verified through: • Written third-party documents provided by the family, such as pharmacy printouts or receipts. • The CDA will also accept evidence of monthly payments or total payments that will be due for medical expenses during the upcoming 12 months. • Written third-party verification forms, if the family is unable to provide acceptable documentation. • If third-party or document review is not possible, written family certification as to costs anticipated to be incurred during the upcoming 12 months. The CDA will make a best effort to determine what expenses from the past are likely to continue to occur in the future. In addition, the CDA must verify that: • The household is eligible for the deduction.

o For medical expenses paid with a charge card, the CDA will require verification that the amount paid, throughout the past twelve months, covers the cost of the medical expense and does not include interest, or other charges. • The costs to be deducted are qualified medical expenses. • The expenses are not paid for or reimbursed by any other source. • Costs incurred in past years are counted only once. Eligible Household The medical expense deduction is permitted only for households in which the head, spouse, or co-head is at least 62, or a person with disabilities. The CDA must verify that the family meets the definition of an elderly or disabled family provided in the Eligibility chapter and as described in Chapter 7 (7-IV.A.) of this plan. Qualified Expenses To be eligible for the medical expense’s deduction, the costs must qualify as medical expenses. See Chapter 6 (6-II.D.) for the CDA’s policy on what counts as a medical expense. Unreimbursed Expenses To be eligible for the medical expense’s deduction, the costs must not be reimbursed by another source.

- 54 - CDA Policy The family will be required to certify that the medical expenses are not paid or reimbursed to the family from any source. If expenses are verified through a third party the third party must certify that the expenses are not paid or reimbursed from any other source. Expenses Incurred in Past Years CDA Policy When anticipated costs are related to on-going payment of medical bills incurred in past years, the CDA will verify: • The anticipated repayment schedule • The amounts paid in the past, and • Whether the amounts to be repaid have been deducted from the family’s annual income in past years 8-II.D. SPECIAL INSPECTIONS [24 CFR 982.405(g)] If a participant or government official reports a life-threatening condition which the owner would be required to repair within 24 hours, the CDA must inspect the unit within 24 hours of notification. If the reported condition is not life-threatening, the CDA must inspect the unit within 15 days of notification. CDA Policy The individual who reports the deficiency must contact the responsible party (owner or tenant) and provide evidence they have made an adequate attempt to have the responsible party remedy the issue prior to the CDA agreeing to conduct a special inspection. During a special inspection, the CDA generally will inspect only those deficiencies that were reported. However, the inspector will record any additional HQS deficiencies that are observed and will require the responsible party to make the necessary repairs. If the annual/biennial inspection has been scheduled or is due within 90 days of the date the special inspection is scheduled the CDA may elect to conduct a full annual/biennial inspection. 8-III.D. CDA RENT REASONABLENESS METHODOLOGY How Market Data Is Collected CDA Policy The CDA will collect and maintain data on market rents in the CDA's jurisdiction. Information sources include newspapers, realtors, market surveys, online rental information (vacancy listings, CoStar, and HousingLink) inquiries of owners and other available sources. The data will be maintained by bedroom size and market areas. Market areas may be defined by zip codes, census tract and zones. The data will be updated on an ongoing basis and rent information that is more than 24 months old will be eliminated from the database. 10-I.C. MOVING PROCESS Notification If a family wishes to move to a new unit, the family must notify the CDA and the owner before moving

- 55 - out of the old unit or terminating the lease on notice to the owner [24 CFR 982.354(d)(2)]. If the family wishes to move to a unit outside the CDA’s jurisdiction under portability, the notice to the CDA must specify the area where the family wishes to move [24 CFR 982.354(d)(2)]. The notices must be in writing [24 CFR 982.5]. CDA Policy The family must provide the owner and the CDA a written notice 61 days prior to moving out of the old unit or terminating the lease. Approval CDA Policy Upon receipt of a family’s notification that it wishes to move, the CDA will determine whether the move is approvable in accordance with the regulations and policies set forth in sections 10- I.A and 10-I.B. The CDA will notify the family in writing of its determination within 10 business days following receipt of the family’s notification. Reexamination of Family Income and Composition CDA Policy For families approved to move to a new unit within the CDA’s jurisdiction, the CDA will perform a new annual reexamination in accordance with the policies set forth in Chapter 11 of this plan. Annual reexamination verifications, in file, for income, assets, expenses that are less than 180 days will be used to process the new reexamination. Verifications older than 180 days must be updated. For families moving into or families approved to move out of the CDA’s jurisdiction under portability, the CDA will follow the policies set forth in Part II of this chapter. Voucher Issuance and Briefing CDA Policy For families approved to move to a new unit within the CDA’s jurisdiction, the CDA will issue a new voucher within 10 business days of the CDA’s written approval to move. The CDA will follow the policies set forth in Chapter 5 on voucher term, extension, and expiration. If a family does not locate a new unit within the term of the voucher and any extensions, the family may remain in its current unit with continued voucher assistance if the owner agrees and the CDA approves. Otherwise, the family will lose its assistance. For families moving into or families approved to move out of the CDA’s jurisdiction under portability, the CDA will follow the policies set forth in Part II of this chapter. Housing Assistance Payments [24 CFR 982.311(d)] When a family moves out of an assisted unit, the CDA may not make any housing assistance payment to the owner for any month after the month the family moves out. The owner may keep the housing assistance payment for the month when the family moves out of the unit. If a participant family moves from an assisted unit with continued tenant-based assistance, the term of the assisted lease for the new assisted unit may begin during the month the family moves out of the first assisted unit. Overlap of the last housing assistance payment (for the month when the family moves out of the old unit) and the first assistance payment for the new unit, is not considered to constitute a

- 56 - duplicative housing subsidy. Zero HAP Families Who Wish to Move [24 CFR 982.455] A participant who is not receiving any subsidy, but whose HAP contract is still in force, may request a voucher to move to a different unit. The CDA must issue a voucher to move unless it has grounds to deny assistance under the program regulations. However, if the CDA determines no subsidy would be paid at the new unit, the CDA may refuse to enter into a HAP contract on behalf of the family. CDA Policy If a zero HAP family requests to move to a new unit, the family may request a voucher to move. However, if no subsidy will be paid at the unit to which the family requests to move, the CDA will not enter into a HAP contract on behalf of the family for the new unit. 11-I.B STREAMLINED ANNUAL REEXAMINATIONS [24 CFR 982.516(b)]

HUD permits the CDA to streamline the income determination process for family members with fixed sources of income. While third-party verification of all income sources must be obtained during the intake process and every three years thereafter, in the intervening years the CDA may determine income from fixed sources by applying a verified cost of living adjustment (COLA) or rate of interest. The CDA may, however, obtain third-party verification of all income, regardless of the source. Further, upon request of the family, the CDA must perform third-party verification of all income sources.

Fixed sources of income include Social Security and SSI benefits, pensions, annuities, disability or death benefits, and other sources of income subject to a COLA or rate of interest. The determination of fixed income may be streamlined even if the family also receives income from other non-fixed sources.

Two streamlining options are available, depending upon the percentage of the family’s income that is received from fixed sources. If at least 90 percent of the family’s income is from fixed sources, the CDA may streamline the verification of fixed income and may choose whetherbut is not required to verify non-fixed income amounts in years where no fixed-income review is required. If the family receives less than 90-percent of its income from fixed sources, the CDA may streamline the verification of fixed income and must verify non-fixed income annually.

CDA Policy The CDA will streamline the annual reexamination process by applying the verified COLA or interest rate to fixed-income sources. The CDA will document in the file how the determination that a source of income was fixed was made.

If a family member with a fixed source of income is added, the CDA will use third-party verification of all income amounts for that family member.

If verification of the COLA or rate of interest is not available, the CDA will obtain third-party verification of income amounts.

Third-party verification of fixed sources of income will be obtained during the intake process and

- 57 - at least once every three years thereafter.

Third-party verification of non-fixed income will be obtained annually regardless of the percentage of family income received from fixed sources. 11-I.C. SCHEDULING ANNUAL REEXAMINATIONS The CDA must establish a policy to ensure that the annual reexamination for each family is completed within a 12-month period, and may require reexaminations more frequently [HCV GB p. 12-1]. CDA Policy The CDA will begin the annual reexamination process 120 days in advance of its scheduled effective date. Generally, the CDA will schedule annual reexamination effective dates to coincide with the family’s anniversary date. Anniversary date is defined as 12 months from the effective date of the family’s last annual reexamination or, during a family’s first year in the program, from the effective date of the family’s initial examination (admission). If the family moves to a new unit, the CDA will perform a new annual reexamination. The CDA may also schedule an annual reexamination for completion prior to the anniversary date for administrative purposes. Notification of and Participation in the Annual Reexamination Process The CDA is required to obtain the information needed to conduct annual reexaminations. How that information will be collected is left to the discretion of the CDA. However, the CDA should give tenants who were not provided the opportunity the option to complete Form HUD-92006 at this time [Notice PIH 2009-36]. CDA Policy The CDA will conduct annual recertifications through two separate processes.

MAIL APPOINTMENTS: Families identified as fixed-income, will participate in the annual recertification process through first-class mail. • Fixed income is defined as income that is at least 100% from SS, SSI, federal, state, local and private pension plans, periodic payments received from annuities, insurance policies, retirement funds, disability or death benefits and any other similar types of periodic receipts that are substantially the same amounts from year to year. The application package will include forms for the family to complete and instructions on what documents must be provided to the CDA to complete the annual recertification process. If the family fails to return the application package, the family will be provided with a second opportunity to return the items. If the family fails to return the application package and the necessary documents required for recertification by the required deadline, the CDA will send a notice a termination of assistance.

IN OFFICE APPOINTMENTS:

- 58 - Families not identified as fixed-incomerequesting in-person appointments will be required to participate in an annual reexamination interview, which the CDA strongly encourages attendance by the head of household and all members 18 years of age or older. Regardless of who attends the annual reexamination interview, all adults will be required to sign all applicable documentation.

o If participation in an in-person interview poses a hardship the family should contact the CDA to request a reasonable accommodation (see Chapter 2). Notification of annual reexamination interviews will be sent by first-class mail and will contain the date, time, and location of the interview.

o The letter includes instructions permitting the family to reschedule the interview if necessary and for those who may need alternate arrangements due to a disability that they may request a reasonable accommodation. In addition, it will include forms for the family to complete in preparation for the interview and inform the family of the information and documentation that must be brought to the interview. If the family is unable to attend a scheduled interview, the family should contact the CDA in advance of the interview to schedule a new appointment. If a family does not attend the scheduled interview, the CDA will send a second notification with a new interview date and appointment time. If a family fails to attend two scheduled interviews without CDA approval, or if the notice is returned by the post office with no forwarding address, a notice of termination (see Chapter 12) will be sent to the family’s address of record, and to any alternate address provided in the family’s file. A language block written in 10 languages will be included to all informing the family of free translation services, upon their request. 11-I.D. CONDUCTING ANNUAL REEXAMINATIONS As part of the annual reexamination process, families are required to provide updated information to the CDA regarding the family’s income, expenses, and composition [24 CFR 982.551(b)]. CDA Policy Families will be asked to bring provide all required information (as described in the reexamination notice) toat the in-person reexamination appointment or returned to the CDA office. The required information will include a CDA-designated reexamination application form, an Authorization for the Release of Information/Privacy Act Notice, and Applicant Tenant Certification, and Statement of Responsibilities as well as supporting documents or forms related to the family’s income, expenses, and family composition. Any required documents or information that the family is unable to provide at the time of the interview must be provided within 10 business days of the interview. The CDA will attempt to collect this information from the participant two times. If the family does not provide the required documents or information within the required time period (plus any extensions), the family will be sent a notice of termination (See Chapter 12)

- 59 -

Additionally, HUD recommends that at annual reexaminations the CDA ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state [Notice PIH 2012-28].

CDA Policy

At the annual reexamination, the CDA will ask whether the tenant, or any member of the tenant’s household, is subject to a lifetime sex offender registration requirement in any state. The CDA will use the Dru Sjodin National Sex Offender database to verify the information provided by the tenant.

If the CDA proposes to terminate assistance based on lifetime sex offender registration information, the CDA must notify the household of the proposed action and must provide the subject of the record and the tenant a copy of the record and an opportunity to dispute the accuracy and relevance of the information prior to termination. [24 CFR 5.903(f) and 5.905(d)]. (See Chapter 12.) The information provided by the family generally must be verified in accordance with the policies in Chapter 7. Unless the family reports a change, or the CDA has reason to believe a change has occurred in information previously reported by the family, certain types of information that are verified at admission typically do not need to be re-verified on an annual basis. These include: • Legal identity • Age • Social security numbers • A person’s disability status • Citizenship or immigration status If adding a new family member to the unit causes overcrowding according to the housing quality standards (HQS) (see Chapter 8), the CDA must issue the family a new voucher, and the family must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the CDA must terminate the HAP contract in accordance with its terms [24 CFR 982.403]. 11-II.B. CHANGES IN FAMILY AND HOUSEHOLD COMPOSITION The family is required to report all changes in family composition. The CDA must adopt policies prescribing when and under what conditions the family must report changes in income and family composition. However, due to family obligations under the program, the CDA has limited discretion in this area. CDA Policy The CDA will conduct interim reexaminations to account for any changes in household composition that occur between annual reexaminations. New Family Members Not Requiring CDA Approval The addition of a family member as a result of birth, adoption, or court-awarded custody does not

- 60 - require CDA approval. However, the family is required to promptly notify the CDA of the addition [24 CFR 982.551(h)(2)]. CDA Policy The family must inform the CDA of the birth, adoption or court-awarded custody of a child within 30 calendar days. The family must disclose and provide documentation of the child’s SSN within 90 days of birth or custody award. New Family and Household Members Requiring Approval With the exception of children who join the family as a result of birth, adoption, or court-awarded custody, a family must request CDA approval to add a new family member [24 CFR 982.551(h)(2)] or other household member (live-in aide or foster child) [24 CFR 982.551(h)(4)]. Generally, additions to a household, where the voucher size will change, will not be approved. In certain circumstances, the addition may be approved, and the family maintains the same size voucher. When any new family member is added, the CDA must make appropriate adjustments in the family share of the rent and the HAP payment at the effective date of either the annual or interim reexamination [24 CFR 982.516(e)(2)]. If a change in family size causes a violation of Housing Quality Standards (HQS) space standards (see Chapter 8), the CDA must issue the family a new voucher, and the family and CDA must try to find an acceptable unit as soon as possible. If an acceptable unit is available for rental by the family, the CDA must terminate the family’s HAP contract in accordance with its terms [24 CFR 982.403]. CDA Policy Families must request CDA approval to add a new family member, live-in aide, foster child, or foster adult. This includes any person not on the lease who is expected to stay in the unit for more than 15 days within a 12-month period, and therefore no longer qualifies as a “guest.” Requests must be made in writing and approved by the CDA prior to the individual moving into the unit. Requests to add children as family members who require CDA approval will be reviewed on a case by case basis. The CDA will take into account the stability and longevity of the situation. CDA approval will be contingent on the availability of funds to serve a larger household. The CDA will not approve the addition of a new family or household member unless the individual meets the CDA’s eligibility criteria (see Chapter 3) and documentation requirements (see Chapter 7, Part II). The CDA will not approve the addition of a foster child or foster adult if it will cause a violation of HQS space standards. If the CDA determines an individual meets the CDA’s eligibility criteria and documentation requirements, the CDA will provide written approval to the family. If the approval of a new family member or live-in aide will cause overcrowding according to HQS standards, the approval letter will explain that the family will be issued another voucher and will be required to move. If the CDA determines that an individual does not meet the CDA’s eligibility criteria or documentation requirements, the CDA will notify the family in writing of its decision to deny

- 61 - approval of the new family or household member and the reasons for the denial. The CDA will make its determination within 10 business days of receiving all information required to verify the individual’s eligibility. Departure of a Family or Household Member Families must promptly notify the CDA, in writing, if any family member no longer lives in the unit [24 CFR 982.551(h)(3)]. Because household members are considered when determining the family unit (voucher) size [24 CFR 982.402], the CDA also needs to know when any live-in aide, foster child, or foster adult ceases to reside in the unit. CDA Policy If a household member ceases to reside in the unit, the family must inform the CDA in writing within 30 calendar days. This requirement also applies to a family member who has been considered temporarily absent at the point that the family concludes the individual is permanently absent. If a live-in aide, foster child, or foster adult ceases to reside in the unit, the family must inform the CDA within 30 calendar days. 12-I.E. MANDATORY POLICIES AND OTHER AUTHORIZED TERMINATIONS Mandatory Policies [24 CFR 982.553(b) and 982.551(l)] HUD requires the CDA to establish policies that permit the CDA to terminate assistance if the CDA determines that: • Any household member is currently engaged in any illegal use of a drug, or has a pattern of illegal drug use that interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents • Any household member’s abuse or pattern of abuse of alcohol may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents • Any household member has violated the family’s obligation not to engage in any drug-related criminal activity • Any household member has violated the family’s obligation not to engage in violent criminal activity Use of Illegal Drugs and Alcohol Abuse CDA Policy • The CDA will terminate a family’s assistance if any household member is currently engaged in any illegal use and/or possession of a drug, or has a pattern of illegal drug use that interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents. • The CDA will terminate assistance if any household member’s abuse or have a pattern of abuse of alcohol which threatens the health, safety, or right to peaceful enjoyment of the premises by other residents.

- 62 - o Currently engaged in is defined as any use of illegal drugs during the previous twelve months. The CDA will consider all credible evidence, including but not limited to, any record of arrests, convictions, or eviction of household members related to the use of illegal drugs or abuse of alcohol. A record, or records, of arrest(s) will not be used as the sole basis for the termination or proof that the participant engaged in disqualifying criminal activity. In making its decision to terminate assistance, the CDA will consider alternatives as described in Section 12-II.C and other factors described in Sections 12-II.D and 12-II.E. Upon consideration of such alternatives and factors, the CDA may, on a case-by-case basis, choose not to terminate assistance. Drug-Related and Violent Criminal Activity [24 CFR 5.100] Drug means a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802). Drug-related criminal activity is defined by HUD as the illegal manufacture, sale, distribution, or use of a drug, or the possession of a drug with intent to manufacture, sell, distribute or use the drug. Violent criminal activity means any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage. CDA Policy • The CDA will terminate a family’s assistance if any household member or household guest has violated the family’s obligation not to engage in any drug-related or violent criminal activity during participation in the HCV program. • The CDA will consider all credible evidence, including but not limited to, any record of arrests and/or convictions of household members or household guests related to drug-related or violent criminal activity, and any eviction or notice to evict based on drug-related or violent criminal activity. • A record, or records, of arrest(s) will not be used as the sole basis for the termination or proof that the participant engaged in disqualifying criminal activity. • In making its decision to terminate assistance, the CDA will consider alternatives as described in Section 12-II.C and other factors described in Sections 12-II.D and 12-II.E. Upon consideration of such alternatives and factors, the CDA may, on a case-by-case basis, choose not to terminate assistance. Family Absence from the Unit [24 CFR 982.312] The family may be absent from the unit for brief periods. The CDA must establish a policy on how long the family may be absent from the assisted unit. However, the family may not be absent from the unit for a period of more than 180 consecutive calendar days for any reason. Absence in this context means that no member of the family is residing in the unit.

- 63 - CDA Policy Except as a reasonable accommodation to a disability, no family (any member) may be absent from the unit for more than 30 consecutive days. If the family (any member) is absent from the unit for more than 30 consecutive calendar days, the family’s assistance willmay be terminated. Notice of termination will be sent in accordance with Section 12-II.F. A reasonable accommodation for a person with a disability may be requested for an exception to this policy. When requesting a reasonable accommodation to a disability a written request should be submitted to the CDA at a minimum of 30 days prior to the absence when absence is planned. To obtain CDA approval, the family must: 1. Satisfy notice requirements; 2. Provide documentation acceptable to the CDA regarding the length of absence and the reason for the absence; 3. Affirm their intent to return to the unit at the end of the leave period; 4. Agree to be responsible for receiving and responding to all notices sent by the CDA to the unit during periods of absence; 5. Pay rent to the owner and pay for utilities while they are absent, and 6. Make arrangements for the unit to be available for CDA inspections as necessary. In some instances, it may be reasonable to consider an absence greater than 30 days, for a household member that is not disabled. These requests will require the following: • Approval prior to the absence; • Household income will not be adjusted as a result of the temporary absence; • If during the absence the HUD-mandated annual reexamination is due, and the absent member is an adult, they will be removed to allow the CDA to complete this program requirement. If this removal results in a change to the voucher size, the household will be notified about this change. If thisese procedures isare not followed, the unit will be considered abandoned and the CDA will terminate housing assistance payments and the family’s participation in the program. 12-II.D. CRITERIA FOR DECIDING TO TERMINATE ASSISTANCE Evidence For criminal activity, HUD permits the CDA to terminate assistance if a preponderance of the evidence indicates that a household member has engaged in the activity, regardless of whether the household member has been arrested or convicted [24 CFR 982.553(c)]. CDA Policy The CDA will use the concept of the preponderance of the evidence as the standard for making all termination decisions. Preponderance of the evidence is defined as evidence which is of greater weight or more

- 64 - convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole show that the fact sought to be proved is more probable than not. Preponderance of the evidence may not be determined by the number of witnesses, but by the greater weight of all evidence

Consideration of Circumstances [24 CFR 982.552(c)(2)(i)] The CDA is permitted, but not required, to consider all relevant circumstances when determining whether a family’s assistance should be terminated. CDA Policy The CDA will consider the following facts and circumstances when making its decision to terminate assistance: • The seriousness of the case, especially with respect to how it would affect other residents’ safety or property • The effects that the termination of assistance may have on other members of the family who were not involved in the action or failure to act • The extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities or (as discussed further in section 12-II.E) a victim of domestic violence, dating violence, sexual assault or stalking • The length of time since the violation occurred, including the age of the individual at the time of the conducts, as well as the family’s recent history and the likelihood of favorable conduct in the future • While a record, or records, of arrest(s) will not be used as the sole basis for termination, an arrest may, however, trigger an investigation to determine whether the participant actually engaged in disqualifying criminal activity. As part of its investigation, the CDA may obtain the police report associated with the arrest and consider the reported circumstances of the arrest. The CDA may also consider:

o Any statements made by witnesses or the participant not included in the police report o Whether criminal charges were filed o Whether, if filed, criminal charges were abandoned, dismissed, or not prosecuted, or ultimately resulted in an acquittal

o Any other evidence relevant to determining whether or not the participant engaged in disqualifying activity Evidence of criminal conduct will be considered if it indicates a demonstrable risk to safety and/or property • In the case of drug or alcohol abuse, whether the culpable household member is participating in or has successfully completed a supervised drug or alcohol rehabilitation program or has otherwise been rehabilitated successfully

- 65 - • The CDA will require the participant to submit evidence of the household member’s current participation in or successful completion of a supervised drug or alcohol rehabilitation program, or evidence of otherwise having been rehabilitated successfully. • In the case of program abuse, the dollar amount of the overpaid assistance and whether or not a false certification was signed by the family 12-III.B. GROUNDS FOR OWNER TERMINATION OF TENANCY [24 CFR 982.310, 24 CFR 5.2005 (c) and Form HUD-52641-A, Tenancy Addendum,] During the term of the lease, the owner is not permitted to terminate the tenancy except for serious or repeated violations of the lease, certain violations of state or local law, or other good cause. Serious or Repeated Lease Violations The owner is permitted to terminate the family’s tenancy for serious or repeated violations of the terms and conditions of the lease, except when the violations are related to incidents of actual or threatened domestic violence, dating violence, sexual assault or stalking and the victim is protected from eviction by the Violence against Women Act of 2013 (see section 12-II.E). A serious lease violation includes failure to pay rent or other amounts due under the lease. However, the CDA’s failure to make a HAP payment to the owner is not a violation of the lease between the family and the owner. Violation of Federal, State, or Local Law The owner is permitted to terminate the tenancy if a family member violates federal, state, or local law that imposes obligations in connection with the occupancy or use of the premises. Criminal Activity or Alcohol Abuse The owner may terminate tenancy during the term of the lease if any covered person, meaning any member of the household, a guest or another person under the tenant’s control commits any of the following types of criminal activity (for applicable definitions see 24 CFR 5.100): • Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of the premises by, other residents (including property management staff residing on the premises); • Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of their residences by, persons residing in the immediate vicinity of the premises; • Any violent criminal activity on or near the premises; or • Any drug-related criminal activity on or near the premises. However, in the case of criminal activity related to domestic violence, dating violence, sexual assault or stalking, if the tenant or an affiliated individual is the victim, the criminal activity may not be construed as cause for terminating the victim’s tenancy. (See section 12-II.E). The owner may terminate tenancy during the term of the lease if any member of the household is: • Fleeing to avoid prosecution, custody, or confinement after conviction for a crime or an attempt to commit a crime that is a felony under the laws of the place from which the individual flees, or that, in the case of the State of New Jersey, is a high misdemeanor; or • Violating a condition of probation or parole imposed under federal or state law.

- 66 - The owner may terminate tenancy during the term of the lease if any member of the household has engaged in abuse of alcohol that threatens the health, safety, or right to peaceful enjoyment of the premises by other residents. Evidence of Criminal Activity The owner may terminate tenancy and evict by judicial action a family for criminal activity by a covered person if the owner determines the covered person has engaged in the criminal activity, regardless of whether the covered person has been arrested or convicted for such activity and without satisfying the standard of proof used for a criminal conviction. This is the case except in certain incidents where the criminal activity directly relates to domestic violence, dating violence, sexual assault, or stalking, and the tenant or affiliated individual is the victim or threatened victim of the domestic violence, dating violence, sexual assault, or stalking. Other Good Cause During the initial lease term, the owner may not terminate the tenancy for “other good cause” unless the owner is terminating the tenancy because of something the family did or failed to do. During the initial lease term or during any extension term, other good cause includes the disturbance of neighbors, destruction of property, or living or housekeeping habits that cause damage to the unit or premises. After the initial lease term, “other good cause” for termination of tenancy by the owner includes: • Failure by the family to accept the offer of a new lease or revision; • The owner's desire to use the unit for personal or family use, or for a purpose other than as a residential rental unit; • A business or economic reason for termination of the tenancy (such as sale of the property, renovation of the unit, or desire to lease the unit at a higher rent). After the initial lease term, the owner may give the family notice at any time, in accordance with the terms of the lease. If a property is subject to foreclosure, during the term of the lease, the new owner of the property does not have good cause to terminate the tenant’s lease, unless the new owner will occupy the unit as their primary residence and has provided the tenant with at least a 90-day notice. In that case, the lease may be terminated effective on the date of sale, although the tenant is still entitled to a 90-day notice to vacate. See Section 13-II.G for a discussion of PHA policies relating to units in foreclosure.

PART I. OWNERS IN THE HCV PROGRAM

13-I.A. OWNER RECRUITMENT AND RETENTION [HCV GB, pp. 2-4 to 2-6, HCV Landlord Strategy Guidebook for PHAs] Recruitment The CDA is responsible for ensuring that very low-income families have access to all types and ranges of affordable housing in the CDA’s jurisdiction, particularly housing outside areas of poverty or minority concentration. A critical element in fulfilling this responsibility is for the CDA to ensure that a sufficient number of owners, representing all types and ranges of affordable housing in the CDA’s jurisdiction, are willing to participate in the HCV program.

- 67 - To accomplish this objective, the CDA must identify and recruit new owners to participate in the program.

If the CDA will be conducting outreach events, the CDA must ensure that notices and communications during outreach events are provided in a manner that is effective for persons with hearing, visual, and other communications-related disabilities. The CDA must also take reasonable steps to ensure meaningful access to programs to persons with limited English proficiency. CDA Policy The CDA will conduct owner outreach to ensure that owners are familiar with the program and its advantages. The CDA will actively recruit property owners with property located outside areas of poverty and minority concentration. These outreach strategies will include: • Distributing printed material about the program to property owners and managers • Holding owner recruitment/information meetings at least once a year • Participating in community-based organizations comprised of private property and apartment owners and managers • To the extent practical, partnering with and attending events hosted by other area agencies to deliver information about the HCV program Outreach strategies will be monitored for effectiveness and adapted accordingly. The following areas have been identified as areas of poverty and minority concentration within the CDA’s jurisdiction: Census Tract 607.10, located in the city of Burnsville. Retention In addition to recruiting owners to participate in the HCV program, the CDA must also provide the kind of customer service that will encourage participating owners to remain active in the program. CDA Policy All CDA activities that may affect an owner’s ability to lease a unit will be processed as rapidly as possible, in order to minimize vacancy losses for owners. The CDA will hold an annual owners’ conference to discuss any program changes and new topics as well as provide an opportunity for owners to ask questions, obtain written materials and meet program staff. The CDA will provide owners with a handbook that explains the program, including HUD and CDA policies and procedures, in easy-to-understand language. The CDA will give special attention to helping new owners succeed through activities such as: • The CDA will require first-time owners (or their agents) to participate in a briefing session on HAP contract requirements. • Providing the owner with a designated CDA contact person.

- 68 - • Providing other written information about how the program operates, including answers to frequently asked questions. • Provide program information as well as frequently used forms on the CDA Website. Additional services may be undertaken on an as-needed basis, and as resources permit.

13-II.G. FORECLOSURE [Notice PIH 2010-49] Families receiving HCV assistance are entitled to certain protections set forth under the Protecting Tenants at Foreclosure Act (PTFA). During the term of the lease, the new owner of the property does not have good cause to terminate the tenant’s lease, unless the new owner will occupy the unit as their primary residence and has provided the tenant with at least a 90-day notice. In that case, the lease may be terminated effective on the date of sale, although the tenant is still entitled to a 90-day notice to vacate. Further, the new owner assumes interest in the lease between the prior owner and the tenant and to the HAP contract.

Any state or local law that provides longer time periods or other additional protections for tenants also applies. CDA Policy If a property is in foreclosure, the CDPHA will make all reasonable efforts to determine the status of the foreclosure and ownership of the property and will continue to make payments to the original owner until ownership legally transfers in accordance with the HAP contract.

The CDPHA will attempt to obtain a written acknowledgement of the assignment of the HAP contract from the successor in interest. This will include a request for owner information, including a tax identification number and payment instructions from the new owner. Even if the new owner does not acknowledge the assignment of the HAP contract in writing, the assignment is still effective by operation of law.

The PHCDA will inform the tenant that they must continue to pay rent in accordance with the lease, and if the new owner refuses to accept payment or cannot be identified, the tenant should pay rent into escrow. Failure to pay rent may constitute an independent ground for eviction.

In the event that the CDPHA is unable to make HAP payments to the new owner due to an action or inaction by the new owner that prevents such payments (e.g., rejection of payments or failure to maintain the property according to HQS), or due to an inability to identify the new owner, the CDPHA will either use the funds to pay:

The utilities that are the owner’s responsibility after taking reasonable steps to notify the owner; except that if the unit has been or will be rendered uninhabitable due to termination or threat of termination of service, prior notice is not required. In the latter case, the CDPHA shall notify the owner within a reasonable time after making the utility payment; or

For the family’s reasonable moving costs, including security deposit costs.

- 69 - The CDPHA will also refer the tenant, as needed, to the local legal aid office in order to ensure adequate protection of the tenant’s rights and enforcement of the successor in interest’s performance under the HAP contract.

See Section 12-III.B for a discussion of foreclosure as it pertains to owner termination of tenancy. 16-II.B. PAYMENT STANDARDS [24 CFR 982.503; HCV GB, Chapter 7] The payment standard sets the maximum subsidy payment a family can receive from the CDA each month [24 CFR 982.505(a)]. Payment standards are based on fair market rents (FMRs) published annually by HUD. FMRs are set at a percentile within the rent distribution of standard quality rental housing units in each FMR area. For most jurisdictions FMRs are set at the 40th percentile of rents in the market area. The CDA must establish a payment standard schedule that establishes payment standard amounts for each FMR area within the CDA’s jurisdiction, and for each unit size within each of the FMR areas. For each unit size, the CDA may establish a single payment standard amount for the whole FMR area, or may set different payment standards for different parts of the FMR area. Unless HUD grants an exception, the CDA is required to establish a payment standard within a “basic range” established by HUD – between 90 and 110 percent of the published FMR for each unit size. Updating Payment Standards When HUD updates its FMRs, the CDA must update its payment standards if the standards are no longer within the basic range [24 CFR 982.503(b)]. HUD may require the CDA to make further adjustments if it determines that rent burdens for assisted families in the CDA’s jurisdiction are unacceptably high [24 CFR 982.503(g)]. CDA Policy The CDA will review the appropriateness of the payment standards on an annual basis when the new FMR is published, and at other times as determined necessary. In addition to ensuring the payment standards are always within the “basic range” the CDA will consider the following factors when determining whether an adjustment should be made to the payment standard schedule: Funding Availability: The CDA will review the budget to determine the impact projected subsidy adjustments will have on funding available for the program and the number of families served. The CDA will compare the number of families who could be served under revised payment standard amounts with the number assisted under current payment standard amounts. Rent Burden of Participating Families: Rent burden will be determined by identifying the percentage of families, for each unit size, that are paying more than 30 percent of their monthly adjusted income as the family share. When 40 percent or more of families, for any given unit size, are paying more than 30 percent of adjusted monthly income as the family share, the CDA will consider increasing the payment standard. In evaluating rent burdens, the CDA will not include families renting a larger unit than their family unit size.

- 70 - Quality of Units Selected: The CDA willmay review the quality of units selected by participant families when making the determination of the percent of income families are paying for housing, to ensure that payment standard increases are only made when needed to reach the mid-range of the market. Changes in Rent to Owner: The CDA may review a sample of the units to determine how often owners are increasing or decreasing rents and the average percent of increases/decreases by bedroom size. Unit Availability: The CDA will review the vacancy rates and the availability of units for each unit size, particularly in areas with low concentrations of poor and minority families. Lease-up Time and Success Rate: The CDA will consider the percentage of families that are unable to locate suitable housing before the voucher expires and whether families are leaving the jurisdiction to find affordable housing. Effective dates of Cchanges to payment standard amounts will be determined at time of update. The CDA will always ensure the payment standards will be within the basic range.effective on January 1st of every year, or within three months of the FMR effective date, whichever is earlier. The effective date is applicable both to HUD-required revisions and to discretionary revisions. Exception Payment Standards [24 CFR 982.503(c)(5), Notice PIH 2018-01] The CDA must request HUD approval to establish payment standards that are higher than the basic range. At HUD’s sole discretion, HUD may approve a payment standard amount that is higher than the basic range for a designated part of the FMR area. HUD may approve an exception payment standard amount (in accordance with program requirements) for all units, or for all units of a given size, leased by program families in the exception area. Any CDA with jurisdiction in the exception area may use the HUD-approved exception payment standard amount. The total population of all HUD-approved exception areas in an FMR area may not include more than 50 percent of the population of the FMR area. A non-SAFMR PHA may establish an exception payment standard for a zip code area of up to and including 110 percent of the SAFMR determined by HUD for that zip code area. Regardless of the level of the exception payment standard compared to the metropolitan area FMRs (MAFMRs), the PHA must send an email to [email protected] to notify HUD that it has adopted an exception payment standard based on the SAFMR. A PHA that adopts an exception payment standard pursuant to this authority must apply it to the entire ZIP code area, for both its HCV, and if applicable, its PBV program. For the PBV program, this means that the rent to owner may not exceed the new exception payment standard amount, provided the rent is still reasonable. A PHA that adopts an exception payment standard area must revise its briefing materials to make families aware of the exception payment standard and the area that it covers. Voluntary Use of Small Area FMRs [24 CRF 982.503, Notice PIH 2018-01] PHAs that administer vouchers in a metropolitan area where the adoption of small area FMRs (SAFMRs) is not required may request approval from HUD to voluntarily adopt SAFMRs. CDA Policy The CDA will not voluntarily adopt the use of SAFMRs, except to establish exception payment standards in certain zip code areas, as needed.

- 71 - 16-III.B. INFORMAL REVIEWS Informal reviews are provided for program applicants. An applicant is someone who has applied for admission to the program, but is not yet a participant in the program. Informal reviews are intended to provide a “minimum hearing requirement” [24 CFR 982.554], and need not be as elaborate as the informal hearing requirements. (Federal Register 60, no. 127, (3 July 1995): 34690]. Decisions Subject to Informal Review [24 CFR 982.554(a) and (c)] The CDA must give an applicant the opportunity for an informal review of a decision denying assistance [24 CFR 982.554(a)]. Denial of assistance may include any or all of the following [24 CFR 982.552(a)(2)]: • Denying listing on the CDA waiting list • Denying or withdrawing a voucher • Refusing to enter into a HAP contract or approve a lease • Refusing to process or provide assistance under portability procedures Informal reviews are not required for the following reasons [24 CFR 982.554(c)]: • Discretionary administrative determinations by the CDA • General policy issues or class grievances • A determination of the family unit size under the CDA subsidy standards • A CDA determination not to approve an extension of a voucher term • A CDA determination not to grant approval of the tenancy • A CDA determination that the unit is not in compliance with the HQS • A CDA determination that the unit is not in accordance with the HQS due to family size or composition CDA Policy The CDA will only offer an informal review to applicants for whom assistance is being denied. Denial of assistance includes: denying listing on the CDA waiting list; denying or withdrawing a voucher; refusing to enter into a HAP contract or approve a lease; refusing to process or provide assistance under portability procedures. 16-III.C. INFORMAL HEARINGS FOR PARTICIPANTS [24 CFR 982.555] The CDA must offer an informal hearing for certain CDA determinations relating to the individual circumstances of a participant family. A participant is defined as a family that has been admitted to the CDA’s HCV program and is currently assisted in the program. The purpose of the informal hearing is to consider whether the CDA’s decisions related to the family’s circumstances are in accordance with the law, HUD regulations and CDA policies. The CDA is not permitted to terminate a family’s assistance until the time allowed for the family to request an informal hearing has elapsed, and any requested hearing has been completed. Termination of assistance for a participant may include any or all of the following: • Refusing to enter into a HAP contract or approve a lease

- 72 - • Terminating housing assistance payments under an outstanding HAP contract • Refusing to process or provide assistance under portability procedures Decisions Subject to Informal Hearing Circumstances for which the CDA must give a participant family an opportunity for an informal hearing are as follows: • A determination of the family’s annual or adjusted income, and the use of such income to compute the housing assistance payment • A determination of the appropriate utility allowance (if any) for tenant-paid utilities from the CDA utility allowance schedule • A determination of the family unit size under the CDA’s subsidy standards • A determination to terminate assistance for a participant family because of the family’s actions or failure to act • A determination to terminate assistance because the participant has been absent from the assisted unit for longer than the maximum period permitted under CDA policy and HUD rules • A determination to terminate a family’s Family Self Sufficiency contract, withhold supportive services, or propose forfeiture of the family’s escrow account [24 CFR 984.303(i)] Circumstances for which an informal hearing is not required are as follows: • Discretionary administrative determinations by the CDA • General policy issues or class grievances • Establishment of the CDA schedule of utility allowances for families in the program • A CDA determination not to approve an extension or suspension of a voucher term • A CDA determination not to approve a unit or tenancy • A CDA determination that a unit selected by the applicant is not in compliance with the HQS • A CDA determination that the unit is not in accordance with HQS because of family size • A determination by the CDA to exercise or not to exercise any right or remedy against an owner under a HAP contract CDA Policy The CDA will offer participants the opportunity for an informal hearing when required to by the regulations. Remote Informal Hearing The CDA’s essential responsibility is to ensure informal hearings meet the requirements of due process and comply with HUD regulations. Therefore, all CDA policies and processes for remote informal hearings will be conducted in accordance with due process requirements and will be in compliance with HUD regulations. CDA Policy

- 73 - The CDA has sole discretion to require that informal hearings be conducted remotely in case of local, state, or national physical distancing orders, and in cases of inclement weather or natural disaster. In addition, the CDA will conduct an informal hearing remotely upon request as a reasonable accommodation for a person with a disability. The CDA will consider other reasonable requests for a remote informal hearing on a case-by-case basis. Conducting Informal Hearings Remotely CDA Policy The CDA will conduct remote informal hearings via telephone conferencing call or videoconferencing. If the informal hearing will be conducted via videoconferencing, the CDA will ensure that all participants, participant representatives, CDA representatives, and the hearing officer can adequately access the platform (i.e. hear, be heard, see, and be seen). If any participant, representative, CDA representative, or hearing officer is unable to effectively utilize the videoconferencing platform, the informal hearing will be conducted by telephone conferencing call. Whether the informal hearing is to be conducted via videoconferencing or telephone call, the CDA will provide all parties login information and/or telephone call information before the hearing. Informal Hearing Procedures Notice to the Family [24 CFR 982.555(c)] When the CDA makes a decision that is subject to informal hearing procedures, the CDA must inform the family of its right to an informal hearing at the same time that it informs the family of the decision. For decisions related to the family’s annual or adjusted income, the determination of the appropriate utility allowance, and the determination of the family unit size, the CDA must notify the family that they may ask for an explanation of the basis of the determination, and that if they do not agree with the decision, they may request an informal hearing on the decision. For decisions related to the termination of the family’s assistance, or the denial of a family’s request for an exception to the CDA’s subsidy standards, the notice must contain a brief statement of the reasons for the decision, a statement that if the family does not agree with the decision, the family may request an informal hearing on the decision, and a statement of the deadline for the family to request an informal hearing. CDA Policy In cases where the CDA makes a decision for which an informal hearing must be offered, the notice to the family will include all of the following: • The proposed action or decision of the CDA. • A brief statement of the reasons for the decision, including the regulatory reference. • The date the proposed action will take place. • A statement that if the family does not agree with the decision the family may request an

- 74 - informal hearing of the decision. • A deadline for the family to request the informal hearing. The deadline will be ten (10) business days from the date of the notice to the family. • To whom the hearing request should be addressed. • A copy of the CDA’s hearing procedures. • A language block written in 10 languages will be included informing the family of free translation services, upon their request. Scheduling an Informal Hearing [24 CFR 982.555(d)] When an informal hearing is required, the CDA must proceed with the hearing in a reasonably expeditious manner upon the request of the family. CDA Policy A request for an informal hearing must be made in writing and delivered to the CDA either in person, by first class mail, or fax by the close of the business day, no later than 10 business days from the date of the notice to terminate assistance. The CDA must schedule and send written notice of the informal hearing to the family within 10 business days of the family’s request. The family may request to reschedule a hearing for good cause, or if it is needed as a reasonable accommodation for a person with disabilities. Good cause is defined as an unavoidable conflict which seriously affects the health, safety or welfare of the family. Requests to reschedule a hearing must be made orally or in writing prior to the hearing date. At its discretion, the CDA may request documentation of the “good cause” prior to rescheduling the hearing. If the family does not appear within 20 minutes of the scheduled time, and was unable to reschedule the hearing in advance due to the nature of the conflict, the family must contact the CDA as soon as possible. The CDA will reschedule the hearing only if the family can show good cause for the failure to appear, or if it is needed as a reasonable accommodation for a person with disabilities. The CDA will not consider rescheduling if the family has rescheduled two times. If the family cannot show good cause for the failure to appear, or a rescheduling is not needed as a reasonable accommodation, the CDA’s decision will stand. In other circumstances, the CDA may, at its discretion, reschedule the hearing if the family presents compelling evidence that it was unable to meet the 24-hour requirement for seeking rescheduling as well as good cause for failing to appear at the original hearing. Pre-Hearing Right to Discovery [24 CFR 982.555(e)] Participants and the CDA are permitted pre-hearing discovery rights. The family must be given the opportunity to examine before the hearing any CDA documents that are directly relevant to the hearing. The family must be allowed to copy any such documents at their own expense. If the CDA does not make the document available for examination on request of the family, the CDA may not rely on the document at the hearing. The CDA hearing procedures may provide that the CDA must be given the opportunity to examine at the

- 75 - CDA offices before the hearing, any family documents that are directly relevant to the hearing. The CDA must be allowed to copy any such document at the CDA’s expense. If the family does not make the document available for examination on request of the CDA, the family may not rely on the document at the hearing. For the purpose of informal hearings, documents include records and regulations. CDA Policy The family will be allowed to copy any documents related to the hearing at a cost of $.20 per single side page. The family must request discovery of CDA documents no later than 12:00 p.m. on the business day prior to the scheduled hearing date. If the hearing will be conducted remotely, the CDA will compile a hearing packet, consisting of all documents the CDA intends to present at the informal hearing. The CDA will upload the hearing packet to a secure drop box and provide the link to the participant, known representative, if any, at least three days before the scheduled remote informal hearing. The original hearing packet will be in the possession of, and retained by, the CDA. The CDA hearing procedures may provide that the CDA must be given the opportunity to examine at the CDA offices before the hearing, any family documents that are directly relevant to the hearing. The CDA must be allowed to copy any such document at the CDA’s expense. If the family does not make the document available for examination on request of the CDA, the family may not rely on the document at the hearing. CDA Policy The CDA must be given an opportunity to examine at the CDA offices before the hearing any family documents that are directly relevant to the hearing. Whenever a participant requests an informal hearing, the CDA will automatically mail a letter to the participant requesting a copy of all documents that the participant intends to present or utilize at the hearing. The participant must provide such documents to the CDA no later than three (3) business days prior to the hearing date. 16-IV.B. REPAYMENT POLICY Repayment Agreement [24 CFR 792.103] The term repayment agreement refers to a formal written document signed by all adult household members or owner and provided to the CDA in which all adult household members or owner acknowledges a debt in a specific amount and agrees to repay the amount due at specific time periods. General Repayment Agreement Guidelines for Families Payment Thresholds Notice PIH 2017-12 recommends that the total amount that a family must pay each month – the family’s monthly share of rent plus the monthly debt repayment amount – should not exceed 40 percent of the family’s monthly adjusted income. A family may already be paying 40 percent or more of its monthly adjusted income in rent. Moreover, Notice PIH 2017-12 acknowledges that the CDA has the discretion to establish “thresholds and policies” for repayment agreements with families [24 CFR 982.552(c)(1)(vii)].

- 76 - CDA Policy The CDA has established the following thresholds for repayment of debts: • Amounts between $3,000 and the federal or state threshold for criminal prosecution must be repaid within 36 months. • Amounts between $2,000 and $2,999 must be repaid within 30 months. • Amounts between $1,000 and $1,999 must be repaid within 24 months. • Amounts under $1,000 must be repaid within 12 months. If a family can provide evidence satisfactory to the CDA that the threshold applicable to the family’s debt would impose an undue hardship, the CDA may, in its sole discretion, determine that the lower monthly payment amount is reasonable. In making its determination, the CDA will consider all relevant information, including the following: • The amount owed by the family to the CDA; • The reason for the debt; • The family’s current and potential income and expenses; • The family’s current family share, as calculated under 24 CFR 982.515; and/or • The family’s history of meeting its financial responsibilities. Execution of the Agreement CDA Policy Any repayment agreement between the CDA and an assisted/previously assisted household must be signed and dated by the CDA and by all adult household members (if applicable). Due Dates CDA Policy All payments are due by the close of business on the 15th day of the month. If the 15th does not fall on a business day, the due date is the close of business on the first business day after the 15th. Late or Missed Payments CDA Policy If a participant fails to make payments for two consecutive months, the CDA will send the family a delinquency notice giving the family 10 business days to make the late payment and bring their account to current. If the payment is not received by the due date of the delinquency notice, it will be considered a breach of the agreement and the CDA will terminate assistance upon written notification to the family. If a participant owes the CDA money and requests to move with continued assistance, the CDA will require the CDA to be paid in full prior to moving or porting to another jurisdiction.

- 77 - 17-I.A. OVERVIEW [24 CFR 983.5; FR Notice 01/18/17; Notice PIH 2017-21] The project-based voucher (PBV) program allows the CDA, which already administer a tenant-based voucher program under an annual contributions contract (ACC) with HUD, to take up to 20 percent of its authorized units and attach the funding to specific units rather than using it for tenant-based assistance [24 CFR 983.6]. The CDA may only operate a PBV program if doing so is consistent with the CDA’s Annual Plan, and the goal of deconcentrating poverty and expanding housing and economic opportunities [42 U.S.C. 1437f(o)(13)]. CDA Policy The CDA will operate a project-based voucher program using up to 200 vouchers for project- based assistance, plus vouchers for project-based assistance at up to 120 former public housing scattered-site units. For purposes of this chapter, “project” shall be defined in the broadest possible manner allowed by PBV requirements. PBV assistance may be attached to existing housing or newly constructed or rehabilitated housing [24 CFR 983.52]. If PBV units are already selected for project-based assistance either under an agreement to enter into HAP Contract (Agreement) or a HAP contract, the CDA is not required to reduce the number of these units if the number of authorized units is subsequently reduced. However, the CDA is responsible for determining the amount of budget authority that is available for project-based vouchers and ensuring that the amount of assistance that is attached to units is within the amounts available under the ACC, regardless of whether the CDA has vouchers available for project-basing [FR Notice 1/18/17].

Additional Project-Based Units [FR Notice 1/18/17; Notice PIH 2017-21]

The CDA may project-base an additional 10 percent of its units above the 20 percent program limit. The units may be distributed among one, all, or a combination of the categories as long as the total number of units does not exceed the 10 percent cap. Units qualify under this exception if the units: • Are specifically made available to house individuals and families that meet the definition of homeless under section 103 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11302) and contained in the Continuum of Care Interim Rule at 24 CFR 578.3. • Are specifically made available to house families that are comprised of or include a veteran. - Veteran means an individual who has served in the United States Armed Forces. • Provide supportive housing to persons with disabilities or elderly persons as defined in 24 CFR 5.403. • Are located in a census tract with a poverty rate of 20 percent or less, as determined in the most recent American Community Survey Five-Year Estimates. Only units that are under a HAP contract that was first executed on or after April 18, 2017, may beare covered by the 10 percent exception.

CDA Policy

- 78 - Except as noted above, tThe CDA will not set aside units above the 20 percent program limit.

Units Not Subject to the PBV Program Limitation [FR Notice 1/18/17]

PBV units under the RAD program and HUD-VASH PBV set-aside vouchers do not count toward the 20 percent limitation when PBV assistance is attached to them.

In addition, units that were previously subject to certain federal rent restrictions or were receiving another type of long-term housing subsidy provided by HUD are not subject to the cap. The unit must be covered under a PBV HAP contract that first became effective on or after 04/18/17.CDA Policy The CDA will project-base up to 120 former public housing scattered-site units noted above. These units are not project-base any units not subject to the 20 percent cap. 17-II.B. OWNER PROPOSAL SELECTION PROCEDURES [24 CFR 983.51(b)] The CDA must select PBV proposals in accordance with the selection procedures in the CDA administrative plan. The CDA must select PBV proposals by either of the following two methods. • CDA request for PBV Proposals. The CDA may solicit proposals by using a request for proposals to select proposals on a competitive basis in response to the CDA request. The CDA may not limit proposals to a single site or impose restrictions that explicitly or practically preclude owner submission of proposals for PBV housing on different sites. • The CDA may select proposals that were previously selected based on a competition. This may include selection of a proposal for housing assisted under a federal, state, or local government housing assistance program that was subject to a competition in accordance with the requirements of the applicable program, community development program, or supportive services program that requires competitive selection of proposals (e.g., HOME, and units for which competitively awarded LIHTCs have been provided), where the proposal has been selected in accordance with such program's competitive selection requirements within three years of the PBV proposal selection date, and the earlier competitive selection proposal did not involve any consideration that the project would receive PBV assistance. The CDA need not conduct another competition Units Selected Non-Competitively [FR Notice 1/18/17, Notice PIH 2017-21, 24 VFR 983.51(b)] For certain public housing projects where the CDA has ownership interest or control and will spend a minimum amount per unit on rehabilitation or construction, the CDA may attach PBV assistance non- competitivelyselect a project without following one of the two processes above. This exception applies when the CDA is engaged in an initiative to improve, develop, or replace a public housing property or site. The public housing units may either currently be in the public housing inventory or may have been removed from the public housing inventory within five years of the date on which the CDA entered into the AHAP or HAP. If the CDA is planning rehabilitation or new construction on the project, the minimum threshold of $25,000 per unit in hard costs must be expended.

- 79 - If the CDA plans to replace public Housing by attaching PBV assistance to existing housing in which the CDA has an ownership interest or control, then the $25,000 per unit minimum threshold does not apply as long as the existing housing substantially complies with HQS. The CDA must include in the administrative plan what work it plans to do on the property or site and how many PBV units will be added to the site. CDA Policy The CDA will attach PBVs to up to 120 units owned by the CDA as described above. These units needed only minor repair work to meet HQS when selected, and thus substantially complied with HQS at that time. The CDA plans only to do the work needed so that these units will pass HQS. The CDA will select PBV proposals through competitive procedures only when non- competitive selection is not applicable. Solicitation and Selection of PBV Proposals [24 CFR 983.51(c)] CDA procedures for selecting PBV proposals must be designed and actually operated to provide broad public notice of the opportunity to offer PBV proposals for consideration by the CDA. The public notice procedures may include publication of the public notice in a local newspaper of general circulation and other means designed and actually operated to provide broad public notice. The public notice of the CDA request for PBV proposals must specify the submission deadline. Detailed application and selection information must be provided at the request of interested parties. CDA Policy When using competitive procedures, tThe CDA will advertise its request for proposals (RFP) for rehabilitated and newly constructed housing in a local newspaper of general circulation. In addition, the CDA will post the RFP and proposal submission and rating and ranking procedures on its web site. The CDA will publish its advertisement in the newspaper mentioned above one day per week for three weeks prior to the submission deadline. Proposals will be due in the CDA office by close of business 21 calendar days from the date of publication. In order for the proposal to be considered, the owner must submit the proposal to the CDA by the published deadline date, and the proposal must respond to all requirements as outlined in the RFP. Incomplete proposals will not be reviewed. The CDA will review all proposals for the following threshold criteria: • Site: Sites must be compatible with the surrounding neighborhood. For example, if a proposal is for single family or duplex units, the location should be in a single family/duplex residential neighborhood. Sites must be accessible to services and amenities appropriate to the type of housing proposed. Examples include locating a property of predominately larger units close to parks, recreational facilities, shopping, employment and transportation or locating a property of predominately 1-bedroom units for seniors close to medical facilities, transportation and shopping.

- 80 - Sites must meet the requirements of HUD environmental standards. • Design: The proposal must be compliant with Housing Quality Standards (HQS) as well as local codes, ordinances, and zoning requirements. Documentation of compliance may include providing working drawings and specifications for new construction or providing certificates of occupancy or building code inspection reports for existing housing. Amenities incorporated in design should be appropriate to prospective tenants. • Feasibility: The proposal must be marketable and demonstrate a strong likelihood of being financed. • Ability to Successfully Develop, Market and Manage The applicant must be able to demonstrate previous experience with similar housing proposals, education on the Project Based Voucher program, and/or available resources to successfully develop, market and manage the proposal. The CDA will rate and rank proposals for rehabilitated and newly constructed housing using the following criteria: • Projects that provide onsite supportive housing services to its residents. 15 points. • Projects that serve families with children will receive priority in this category. Points will be awarded for applications that have 2+ bedroom units. 10 points. • Proximity of the proposed development to public facilities, sources of employment, and services, including public transportation, health, education and recreation facilities (0-10 points). • Prior extensive experience of the applicant in developing and managing similar residential housing (0-10 points). • Demonstrated ability and capacity of the applicant to proceed expeditiously with the proposal (0-10 points). • Length of commitment to long-term affordability of the proposed housing for households at or below 50% of area median income. Points will be awarded for length of commitment as follows: 1-5 years = 2 points, 6-10 years = 5 points, 11-15 years = 7 points, 16+ years = 10 points. • Extent to which the proposed project has been developed as a result of a cooperative agreement or arrangement among public, semi-public or non-profit agencies and organizations (0-10 points). • Extent to which the proposed project promotes linkages among housing, jobs and transportation and/or promotes higher-density development along selected transportation corridors (0-10 points). • Extent to which the project can serve as a model for other communities (0-10 points). CDA-Owned Units [24 CFR 983.51(e), 983.59, FR Notice 1/18/17, and Notice PIH 2017-21]

- 81 - A CDA-owned unit may be assisted under the PBV program only if the HUD field office or HUD-approved independent entity reviews the selection process and determines that the CDA-owned units were appropriately selected based on the selection procedures specified in the CDA administrative plan. This also applies to non-competitive selections. If the CDA selects a proposal for housing that is owned or controlled by the CDA, the CDA must identify the entity that will review the CDA proposal selection process and perform specific functions with respect to rent determinations, the term of the HAP contract, and inspections. In the case of CDA-owned units, the term of the HAP contract and any HAP contract renewal must be agreed upon by the CDA and a HUD-approved independent entity. In addition, an independent entity must determine the initial rent to owner, the re-determined rent to owner, and reasonable rent. Housing quality standards inspections must also be conducted by an independent entity. The independent entity that performs these program services may be the unit of general local government for the CDA jurisdiction (unless the CDA is itself the unit of general local government or an agency of such government) or another HUD-approved public or private independent entity. CDA Policy The CDA will consider PBV assistance at CDA-owned properties. The CDA may only compensate the independent entity from CDA ongoing administrative fee income (including amounts credited to the administrative fee reserve). The CDA may not use other program receipts to compensate the independent entity for its services. The CDA and independent entity may not charge the family any fee for the appraisal or the services provided by the independent entity. CDA Notice of Owner Selection [24 CFR 983.51(d)] The CDA must give prompt written notice to the party that submitted a selected proposal and must also give prompt public notice of such selection. Public notice procedures may include publication of public notice in a local newspaper of general circulation and other means designed and actually operated to provide broad public notice. CDA Policy Within 10 business days of the CDA making the selection, the CDA will notify the selected owner in writing of the owner’s selection for the PBV program. The CDA will also notify in writing all owners that submitted proposals that were not selected and advise such owners of the name of the selected owner. The CDA will make available to any interested party its rating and ranking sheets and documents that identify the CDA basis for selecting the proposal. These documents will be available for review by the public and other interested parties for one month after publication of the notice of owner selection. The CDA will not make available sensitive owner information that is privileged, such as financial statements and similar information about the owner. The CDA will make these documents available for review at the CDA during normal business hours. The cost for reproduction of allowable documents will be $.20 per page. 17-II.E. SUBSIDY LAYERING REQUIREMENTS [24 CFR 983.55, FR Notice 11/24/08, FR Notice 7/9/10 Notice PIH 2013-11, and FR Notice 6/25/142/28/2020] The CDA may provide PBV assistance only in accordance with HUD subsidy layering regulations [24 CFR

- 82 - 4.13] and other requirements. The subsidy layering review is intended to prevent excessive public assistance by combining (layering) housing assistance payment subsidy under the PBV program with other governmental housing assistance from federal, state, or local agencies, including assistance such as tax concessions or tax credits. HUD requires new construction and rehabilitation housing that will include forms of governmental assistance other than PBVs to undergo a subsidy layering review (SLR) prior to entering into an Agreement to Enter into Housing Assistance Payments Contract (AHAP). Subsidy layering requirements do not apply to existing housing, when PBV is the only governmental assistance, or for projects already subject to a PBV HAP contract, even if the project is recapitalized with outside sources of funding. A further subsidy layering review is not required for new construction or rehabilitation if HUD’s designee has conducted a review that included a review of PBV assistance in accordance with the PBV subsidy layering guidelines. When the CDA selects a new construction or rehabilitation project, the CDA must require information regarding all HUD and/or other federal, state, or local governmental assistance to be disclosed by the project owner using Form HUD-2880. Appendix A of FR Notice 2/28/20 contains a list of all required documentation. Either HUD or a HUD-approved housing credit agency (HCA) in the CDA’s jurisdiction performs the subsidy layering review. The CDA must request an SLR through their local HUD Field Office or, if eligible, through a participating HCA. If the SLR request is submitted to an approved HCA, and the proposed project-based voucher assistance meets HUD subsidy layering requirements, the HCA must submit a certification to HUD and notify the CDA. The CDA may proceed to execute an AHAP at that time if the environmental approval is received. The CDA must submit the necessary documentation to HUD for a subsidy layering review. Except in cases noted above, the CDA may not enter into an agreement to enter into a HAP contract or a HAP contract until HUD, or a HUD-approved housing credit agency (HCA), has conducted any required subsidy layering review and determined that the PBV assistance is in accordance with HUD subsidy layering requirements. In order to satisfy applicable requirements; however, HCAs must conduct subsidy layering reviews in compliance with the guidelines set forth in the Federal Register notice published July 9, 2010. The HAP contract must contain the owner's certification that the project has not received and will not receive (before or during the term of the HAP contract) any public assistance for acquisition, development, or operation of the housing other than assistance disclosed in the subsidy layering review in accordance with HUD requirements. 17-II.F. CAP ON NUMBER OF PBV UNITS IN EACH PROJECT 25 Percent per Project Cap [24 CFR 983.56, FR Notice 1/18/17, and Notice PIH 2017-21] In general, the CDA may not select a proposal to provide PBV assistance for units in a project or enter into an agreement to enter into a HAP or a HAP contract to provide PBV assistance for units in a project, if the total number of dwelling units in the project that will receive PBV assistance during the term of the PBV HAP contract is more than the greater of 25 units or 25 percent of the number of dwelling units (assisted or unassisted) in the project.

- 83 - Exceptions to 25 Percent per Project Cap [FR Notice 1/18/17; Notice PIH 2017-21] As of April 18, 2017, units are not counted against the 25 percent or 25-unit per project cap if: • The units are exclusively for elderly families • The units are for households eligible for supportive services available to all families receiving PBV assistance in the project If the projects is located in a census tract with a poverty rate of 20 percent or less, as determined in the most recent American Community Survey Five-Year estimates, the project cap is the greater of 25 units or 40 percent (instead of 25 percent) of the units in the project [FR Notice 7/14/17].The Housing Opportunity Through Modernization Act of 2016 (HOTMA) eliminated the project cap exemption for projects that serve disabled families and modified the exception for supportive services. Projects where these caps were implemented prior to HOTMA (HAP contracts executed prior to April 18, 2017) may continue to use the former exceptions and may renew their HAP contracts under the old requirements, unless the CDA and owner agree to change the conditions of the HAP contract. However, this change may not be made if it would jeopardize an assisted family’s eligibility for continued assistance in the project. Supportive Services The CDA must include in the CDA administrative plan the type of services offered to families for a project to qualify for the exception and the extent to which such services will be provided. As of April 18, 2017, the project must make supportive services available to all families receiving PBV assistance in the project, but the family does not actually have to accept and receive supportive services for the exception to apply to the unit, although the family must be eligible to receive supportive services. It is not necessary that the services be provided at or by the project, but must be reasonably available to families receiving PBV assistance at the project and designed to help families in the project achieve self- sufficiency or live in the community as independently as possible. The CDA may not require participation in the supportive services as a condition of living in the excepted unit, although such services may be offered. CDA Policy Excepted units will be limited to units for elderly families and households eligible for supportive services available to all families receiving PBV assistance in the project. The services provided will be customized to the family needs including, but not limited to, social/emotional assessments, counseling, identification of community services and resources, and education. Projects not Subject to a Project CAP [FR Notice 1/18/17; Notice PIH 2017-21] PBV units that were previously subject to certain federal rent restrictions or receiving another type of long-term housing subsidy provided by HUD are exempt from the project cap. In other words, 100 percent of the units in these projects may receive PBV assistance. CDA Policy

- 84 - The 120 former public housing scattered-site units that may receive PBV are CDA does not have any PBV units that are subject to the per project cap exception. Thus, all units may receive assistance and occupancy is not limited to elderly families and households eligible for supportive services. Promoting Partially-Assisted Projects [24 CFR 983.56(c)] A CDA may establish local requirements designed to promote PBV assistance in partially assisted projects. A partially assisted project is a project in which there are fewer units covered by a HAP contract than residential units [24 CFR 983.3]. A CDA may establish a per-project cap on the number of units that will receive PBV assistance or other project-based assistance in a multifamily project containing excepted units or in a single-family building. A CDA may also determine not to provide PBV assistance for excepted units, or the CDA may establish a per-project cap of less than 25 units or 25 percent of units. CDA Policy: The CDA will not provide assistance for excepted units. Beyond that, the CDA will not impose any further cap on the number of PBV units assisted per project. 17-III.D. INSPECTING UNITS Pre-selection Inspection [24 CFR 983.103(a)] The CDA must examine the proposed site before the proposal selection date. If the units to be assisted already exist, the CDA must inspect all the units before the proposal selection date, and must determine whether the units substantially comply with HQS. To qualify as existing housing, units must substantially comply with HQS on the proposal selection date. However, the CDA may not execute the HAP contract until the units fully comply with HQS., Pre-HAP Contract Inspections [24 CFR 983.103(b), FR Notice 1/18/17, and Notice PIH 2017-20] The CDA must inspect each contract unit before execution of the HAP contract. The CDA may not enter into a HAP contract covering a unit until the unit fully complies with HQS The CDA may not provide assistance on behalf of the family until the unit fully complies with HQS, unless the CDA has adopted a policy to enter into a HAP contract for units that fail the initial HQS inspection as a results of only non- life threatening conditions, or if the unit passed an alternative inspection. CDA Policy The CDA will not provide assistance on behalf of the family until the unit fully complies with HQS. Turnover Inspections [24 CFR 983.103(c), FR Notice 1/18/17, and Notice PIH 2017-20] Before providing assistance to a new family in a contract unit, the CDA must inspect the unit. The CDA may not provide assistance on behalf of the family until the unit fully complies with HQS.The CDA may not provide assistance on behalf of the family until the unit fully complies with HQS, unless the CDA has adopted a policy to enter into a HAP contract for units that fail the initial HQS inspection as a result of only non-life-threatening conditions. CDA Policy The CDA will not enter into a PBV HAP contract until all the units that will be under contract fully comply with HQS.

- 85 - Annual/Biennial Inspections [24 CFR 983.103(d); FR Notice 6/25/14] At least once every 24 months during the term of the HAP contract, the CDA must inspect a random sample, consisting of at least 20 percent of the contract units in each building to determine if the contract units and the premises are maintained in accordance with HQS. Turnover inspections are not counted toward meeting this inspection requirement. CDA Policy The CDA will inspect, on an annual basis, a random sample consisting of at least 20 percent of the contract units in each building to determine if the contract units and the premises are maintained in accordance with HQS. If more than 20 percent of the sample of inspected contract units in a building fail the initial inspection, the CDA must re-inspect 100 percent of the contract units in the building. Other Inspections [24 CFR 983.103(e)] The CDA must inspect contract units whenever needed to determine that the contract units comply with HQS and that the owner is providing maintenance, utilities, and other services in accordance with the HAP contract. The CDA must take into account complaints and any other information coming to its attention in scheduling inspections. The CDA must conduct follow-up inspections needed to determine if the owner (or, if applicable, the family) has corrected an HQS violation, and must conduct inspections to determine the basis for exercise of contractual and other remedies for owner or family violation of HQS. In conducting CDA supervisory quality control HQS inspections, the CDA should include a representative sample of both tenant-based and project-based units. Inspecting CDA-Owned Units [24 CFR 983.103(f)] In the case of CDA-owned units, the inspections must be performed by an independent agencyentity designated by the CDA and approved by HUD. The independent entity must furnish a copy of each inspection report to the CDA and to the HUD field office where the project is located. The CDA must take all necessary actions in response to inspection reports from the independent agencyentity, including exercise of contractual remedies for violation of the HAP contract by the CDA-owner. 17-V.B. HAP CONTRACT REQUIREMENTS Contract Information [24 CFR 983.203] The HAP contract must specify the following information: • The total number of contract units by number of bedrooms; • The project’s name, street address, city or county, state and zip code, block and lot number (if known), and any other information necessary to clearly identify the site and the building; • The number of contract units in each building, the location of each contract unit, the area of each contract unit, and the number of bedrooms and bathrooms in each contract unit; • Services, maintenance, and equipment to be supplied by the owner and included in the rent to owner;

- 86 - • Utilities available to the contract units, including a specification of utility services to be paid by the owner (included in rent) and utility services to be paid by the tenant; • Features provided to comply with program accessibility requirements of Section 504 of the Rehabilitation Act of 1973 and implementing regulations at 24 CFR part 8; • The HAP contract term; • The number of units in any project that will exceed the 25 percent per project cap, which will be set- aside for occupancy by qualifying families (elderly and/or disabled families and families receiving supportive services); and • The initial rent to owner for the first 12 months of the HAP contract term. Execution of the HAP Contract [24 CFR 983.204] The CDA may not enter into a HAP contract until each contract unit has been inspected and the CDA has determined that the unit complies with the Housing Quality Standards (HQS), unless the CDA has adopted a policy to enter into a HAP contract for units that fail the initial HQS inspection as a result of only non-life-threatening conditions. For existing housing, the HAP contract must be executed promptly after the CDA selects the owner proposal and inspects the housing units. For newly constructed or rehabilitated housing the HAP contract must be executed after the CDA has inspected the completed units and has determined that the units have been completed in accordance with the agreement to enter into HAP, and the owner furnishes all required evidence of completion. CDA Policy For existing housing, the HAP contract will be executed within 10 business daysa reasonable time of the CDA determining that all units pass HQS. For rehabilitated or newly constructed housing, the HAP contract will be executed within 10 business days of the CDA determining that the units have been completed in accordance with the agreement to enter into HAP, all units meet HQS, and the owner has submitted all required evidence of completion. Term of HAP Contract [24 CFR 983.205, FR Notice 1/18/17, and Notice PIH 2017-21] The CDA may enter into a HAP contract with an owner for an initial term of no less than one year and no more than 20 years for each contract unit. The length of the term of the HAP contract for any contract unit may not be less than one year, nor more than 20 years. In the case of CDA-owned units, the term of the HAP contract must be agreed upon by the CDA and the independent entity approved by HUD [24 CFR 983.59(b)(2)]. CDA Policy The term of all PBV HAP contracts will be negotiated with the owner on a case-by-case basis and for an initial term of no less than one year and no more than 10 years. The CDA will consider a term, up to, 15 years when required to comply with another secured financing source. Notwithstanding this CDA policy and the following CDA policy, the CDA may determine to allow as part of the initial HAP contract up to the maximum permissible initial term and extensions for the former public housing scattered-site units.

- 87 - At the time of the initial HAP contract term or any time before expiration of the HAP contract, the CDA may extend the term of the contract for an additional term of up to 20 years if the CDA determines an extension is appropriate to continue providing affordable housing for low-income families. A HAP contract extension may not exceed 20 years. The CDA may provide for multiple extensions; however, in no circumstances may such extensions exceed 20 years, cumulatively. Extensions after the initial extension are allowed at the end of any extension term, provided that not more than 24 months prior to the expiration of the previous extension contract the CDA agrees to extend the term, and that such extension is appropriate to continue providing affordable housing for low-income families or to expand housing opportunities. Extensions after the initial extension term shall not begin prior to the expiration date of the previous extension term. Subsequent extensions are subject to the same limitations. All extensions must be on the form and subject to the conditions prescribed by HUD at the time of the extension. In the case of CDA-owned units, any extension of the term of the HAP contract must be agreed upon by the CDA and the independent entity approved by HUD [24 CFR 983.59(b)(2)]. CDA Policy When determining whether or not to extend an expiring PBV contract, the CDA will consider several factors including, but not limited to: The cost of extending the contract and the amount of available budget authority; The condition of the contract units; The owner’s record of compliance with obligations under the HAP contract and lease(s); Whether the location of the units continues to support the goals of deconcentrating poverty and expanding housing opportunities; and Whether the funding could be used more appropriately for tenant-based assistance. 17-V.E. OWNER RESPONSIBILITIES UNDER THE HAP CONTRACT [24 CFR 983.210] When the owner executes the HAP contract s/he certifies that at such execution and at all times during the term of the HAP contract: • All contract units are in good condition and the owner is maintaining the premises and contract units in accordance with HQS; • The owner is providing all services, maintenance, equipment and utilities as agreed to under the HAP contract and the leases; • Each contract unit for which the owner is receiving HAP, is leased to an eligible family referred by the CDA, and the lease is in accordance with the HAP contract and HUD requirements; • To the best of the owner’s knowledge the family resides in the contract unit for which the owner is receiving HAP, and the unit is the family’s only residence; • The owner (including a principal or other interested party) is not the spouse, parent, child, grandparent, grandchild, sister, or brother of any member of the family; • The amount of the HAP the owner is receiving is correct under the HAP contract; • The rent for contract units does not exceed rents charged by the owner for comparable unassisted units;

- 88 - • Except for HAP and tenant rent, the owner has not received and will not receive any other payment or consideration for rental of the contract unit; • The family does not own or have any interest in the contract unit (does not apply to family’s membership in a cooperative); and • Repair work on the project selected as an existing project that is performed after HAP execution within such post-execution period as specified by HUD may constitute development activity, and if determined to be development activity, the repair work undertaken shall be in compliance with Davis-Bacon wage requirements. 17-VI.D. SELECTION FROM THE WAITING LIST [24 CFR 983.251(c)] Applicants who will occupy units with PBV assistance must be selected from the CDA’s waiting list. The CDA may establish selection criteria or preferences for occupancy of particular PBV units. The CDA may place families referred by the PBV owner on its PBV waiting list. Income Targeting [24 CFR 983.251(c)(6)] At least 75 percent of the families admitted to the CDA’s tenant-based and project-based voucher programs during the CDA fiscal year from the waiting list must be extremely-low income families. The income targeting requirement applies to the total of admissions to both programs. Units with Accessibility Features [24 CFR 983.251(c)(7)] When selecting families to occupy PBV units that have special accessibility features for persons with disabilities, the CDA must first refer families who require such features to the owner. Preferences [24 CFR 983.251(d), FR Notice 11/24/08] The CDA may use the same selection preferences that are used for the tenant-based voucher program, establish selection criteria or preferences for the PBV program as a whole, or for occupancy of particular PBV developments or units. The CDA must provide an absolute selection preference for eligible in-place families as described in Section 17-VI.B. above. The CDA may establish a selection preference for families who qualify for voluntary services, including disability-specific services, offered in conjunction with assisted units, provided that preference is consistent with the PHA Plan. The PHA may not, however, grant a preference to a person with a specific disability [FR Notice 1/18/17]. In advertising such a project, the owner may advertise the project as offering services for a particular type of disability; however, the project must be open to all otherwise eligible disabled persons who may benefit from services provided in the project. In these projects, disabled residents may not be required to accept the particular services offered as a condition of occupancy. If the CDA has projects with “excepted units” for elderly families or supportive services the CDA must give preference to such families when referring families to these units [24 CFR 983.261(b); FR Notice 1/18/17]. CDA Policy The CDA will provide a selection preference when required by the regulation (e.g., eligible in- place families, elderly families or units with supportive services, or mobility impaired persons for accessible units). The CDA will offer an additional preference for PBV projects or units that offer

- 89 - supportive services. 17-VII.D. EXCEPTIONS TO THE OCCUPANCY CAP [24 CFR 983.262,] As of April 17, 2018, the CDA may not pay housing assistance under a PBV HAP contract for more than the greater of 25 units or 25 percent of the number of dwelling units in a project unless: • The units are exclusively for elderly families • The units are for households eligible for supportive services available to all families receiving PBV assistance in the project If the project is located in a census tract with a poverty rate of 20 percent or less, as determined in the most recent American Community Survey Five-Year estimates, the project cap is the greater of 25 units or 40 percent instead of 25 percent) of the units in the project [FR Notice 7/14/17]. If a family at the time of initial tenancy is receiving and while the resident of an excepted unit has received Family Self-Sufficiency (FSS) supportive services or any other service as defined by the CDA and successfully completes the FSS contract of participation or the supportive services requirement, the unit continues to count as an excepted unit for as long as the family resides in the unit. However, if the FSS family fails to successfully complete the FSS contract of participation or supportive services objective and consequently is no longer eligible for the supportive services, the family must vacate the unit within a reasonable period of time established by the CDA and the CDA shall cease paying HAP on behalf of the family. Further, when a family (or remaining members of a family) residing in an excepted unit no longer meets the criteria for a “qualifying family” because the family is no longer an elderly family due to a change in family composition, the CDA has discretion to allow the family to remain in the excepted unit. If the CDA does not exercise this discretion, the family must vacate the unit within a reasonable period of time established by the CDA, and the CDA must cease paying housing assistance payments on behalf of the non-qualifying family. Individuals in units with supportive services who choose to no longer participant in a service or who no longer qualify for services they qualified for at the time of initial occupancy cannot subsequently be denied continued housing opportunity because of this changed circumstance. A CDA or owner cannot determine that a participant’s needs exceed the level of care offered by qualifying services or require that individuals be transitioned to different projected based on service needs. If the family fails to vacate the unit within the established time, the unit must be removed from the HAP contract unless the project is partially assisted, and it is possible for the HAP contract to be amended to substitute a different unit in the building in accordance with program requirements; or the owner terminates the lease and evicts the family. The housing assistance payments for a family residing in an excepted unit that is not in compliance with its family obligations to comply with supportive services requirements must be terminated by the CDA. The CDA may allow a family that initially qualified for occupancy of an excepted unit based on elderly family status to continue to reside in a unit, where through circumstances beyond the control of the family (e.g., death of the elderly family member or long-term or permanent hospitalization or nursing care), the elderly family member no longer resides in the unit. In this case, the unit may continue to be counted as an excepted unit for as long as the family resides in that unit. Once the family vacates the unit, in order to continue as an excepted unit under the HAP contract, the unit must be made available

- 90 - to and occupied by a qualified family. CDA Policy If the CDA later determines to provide for assistance to excepted units, tThe CDA will allow families who initially qualified to live in an excepted unit to remain when circumstances change due to circumstances beyond the remaining family members’ control.

In all other cases, the CDA will provide written notice to the family and owner within 10 business days of making the determination. The family will be given 30 days from the date of the notice to move out of the PBV unit. If the family does not move out within this 30-day time frame, the CDA will terminate the housing assistance payments at the expiration of this 30-day period.

The CDA may make exceptions to this 30-day period if needed for reasons beyond the family’s control such as death, serious illness, or other medical emergency of a family member.

As noted above, these project cap rules are inapplicable to the 120 former public housing scattered sites.

CHAPTER 18

TARGETED RENTAL ASSISTANCE

INTRODUCTION

The CDA administers a number of rental assistance programs which are targeted to specific populations. The federally-funded programs of Family Unification Program, Family Self-Sufficiency, and Shelter Plus Care are covered in this section. This section also covers state and locally funded rental assistance programs of Bridges, Senior Housing Opportunities Program, and Lincoln Place. For these targeted programs, all other policies described in this Administrative Plan are applicable, except as described in this Chapter. This chapter consists of the following six parts. Part I: Family Unification Program Part II: Family Self-Sufficiency Part III: Shelter Plus CareContinuum of Care Part IV: Bridges Part V: Lincoln Place Part VI: Levy Rental Assistance Part VII: Housing Trust Fund

- 91 - PART III: CONTINUUM OF CARE PROGRAM (CoC)

18-III.I. PROGRAM ADMINISTRATION An informal review for applicants does not apply to CoC clients, as they do not enter the program from the CDA’s waiting list. CoC clients are selected and referred to the CDA to receive rental assistance by Dakota County Social Services, the service match provider. After receiving rental assistance, the CoC participant has the right to an informal hearing conducted by Housing Assistance managementas set forth in Chapter 16, Section III of this Plan. VAWA regulations and policies, for the Housing Choice Voucher program, as referenced through this plan, apply to the CoC program. The CDA maintains monthly statistical reports for the CoC program. An Annual Progress Report is submitted to HUD at the end of each operating year of the grant. CoC performance is not reported through SEMAP.

PART VII: HOUSING TRUST FUND

18-VII.A. OVERVIEW The Housing Trust Fund (HTF) program provides temporary rental assistance to eligible households. The CDA administers this program in the form of tenant-based rental assistance. Activities funded through the HTF grant may include rent subsidies, administrative fees, security deposits, utility connection and application fees. The CDA assists 51 households through this program. The CDA administers the HTF program in accordance with Minnesota Housing Trust Fund Program Rental Assistance Program Guide. The policies outlined in this Plan will be used when not addressed in the HTF regulations. 18-VII.B. ELIGIBILITY The HTF program was designed to assist a targeted population, who are high priority homeless. Eligible applicants are persons, or families, whose income, at the time of initial occupancy, does not exceed the program limits of 60 percent of median income as determined by HUD for Dakota County. Households do not have to be eligible for the HCV program in order to be eligible for HTF Rental Assistance. If a HTF applicant owes the CDA money from past program participation, the CDA will require the execution of a repayment agreement before proceeding with processing the applicant for HTF Rental Assistance. 18-VII.C. OUTREACH AND REFERRALS The CDA operates the HTF program throughout Dakota County, Minnesota. The HTF program was designed to assist a targeted population and was established by the Minnesota Legislature in 1988 to support the development of affordable housing for low-income persons and families. Revenue for the HTF is generated from the interest earnings on real estate broker’s trust accounts as provided under section 82.24, subdivision 8; money appropriated and transferred from other state appropriated funds; gifts; grants; and donations received from the United Stated, private foundations, and other sources. Except for Re-entry Assistance vouchers that come from Dakota County Department of Corrections,

- 92 - referrals are received from Coordinated Entry. 18-VII.D. APPLICATIONS, WAITING LIST AND TENANT SELECTION Coordinated Entry will maintain a waiting list for assistance. Waitlist preferences described in this Plan are not applicable to the HTF program. 18-VII.E. INCOME AND SUBSIDY DETERMINATIONS Income will be determined and verified in accordance with Chapters 6 and 7 of this Plan. Length of Time. The HTF rental assistance program is designed to be temporary in nature. An eligible tenant shall not receive rental assistance for longer than five consecutive years. This time limit does not apply to eligible tenants who have applied for federal rental assistance but have not been accepted in such programs due to funding limitations, or who are ineligible for federal rental assistance. The CDA cannot terminate a tenant for not completing or complying with their service or transition plan goals. 18-VII.F. INSPECTION AND LEASING OF UNITS Housing Quality Standards. All units to be leased under the Housing Trust Fund Rental Assistance Program must be inspected by the CDA or a contracted housing professional qualified to perform HQS inspections. (Qualifications may include training, certification, licensure and/or experience including, but not limited to, HQS Certification, UPCS Certification, Building Code inspection, Licensed Contractor, Licensed Property Manager, or other comparable training and/or experience, as approved by Minnesota Housing.)

An inspection form approved by HUD must be used for reporting and kept in the tenant’s file. Units must pass the inspection before the CDA makes a rental subsidy payment to the landlord on behalf of the tenant. If the local jurisdiction has a housing maintenance code and the unit is locally certified on a regular basis, Minnesota Housing may approve a process that involves utilizing the local Minnesota Housing - HTF Rental Assistance Program Guide 14 certification to satisfy the HQS requirement with the purpose of ensuring that the unit provides safe, sanitary and decent housing conditions. If the unit does not pass inspection on or by the date that the subsidy is scheduled to begin, the rental assistance payment shall be prorated based on the date that the unit passes inspection.

Rent Limits & Payment Standard Waivers. It is the CDA’s responsibility to determine that the assisted units are rent reasonable in that the total rent requested for the unit and utilities is reasonable given the going rate for other similar type units, market conditions and any other unique contributing factors.

In general, it is preferred that gross rents do not exceed the payment standard for the HCV jurisdiction in which the unit is located. Exception payment standard rents, if applicable for the jurisdiction, are allowable. The maximum HTF subsidy available is the difference between 30 percent of the household’s gross income and the area payment standard. The landlord may not charge more rent for units assisted with a rental subsidy than for comparable unassisted units. The tenant may wish to rent a unit that exceeds the payment standard. In this event, the tenant would be responsible for their designated portion as well as the difference between the gross rent and the area exception payment standard rent. The CDA must determine if the rent is reasonable and discuss the impact of the additional expense with the household and evaluate whether they can afford the additional expense based on their monthly budget. To document that rent reasonableness was considered and affordability was discussed with the

- 93 - household, the CDA will complete the Minnesota Housing Payment Standard Waiver form and maintain it in the participant’s file.

Certificate of Participation. A certificate of participation for certifies that a household is eligible for HTF Rental Assistance and outlines the conditions and procedures for obtaining a Rental Subsidy to applicants and landlords. The certificate of participation allows the eligible applicant a prescribed time to locate a suitable unit and submit the necessary documents to the CDA. If the household does not locate a unit within the timeframe, the CDA has the discretion to extend the timeframe or to withdraw the availability of the Rental Assistance.

Leasing Procedure. Initial lease terms may range from thirty days to one year. Landlords may use their own lease form; however, the landlord and the tenant must execute a Lease Addendum in the form required by Minnesota Housing. The Lease Addendum is designed to incorporate all required provisions for participating in the HTF Program. The landlord and the CDA must execute a rental subsidy contract, which provides for the payment of the Rental Subsidy to the landlord. All documents relating to leasing shall be maintained in the participant’s file. The typical leasing procedure is as follows: • The tenant locates a suitable unit. • The tenant submits a signed request for lease approval to the CDA. • The CDA conducts an HQS inspection or arranges for a qualified contracted housing professional to conduct the HQS inspection. • When the unit passes the HQS inspection, the landlord/management company and the tenant sign the Lease and the Lease Addendum, and the landlord/management company and the CDA sign the rental subsidy contract.

Lease Extension. The Lease Addendum provides for a renewal of the Lease after its initial term. Renewals may be month-to-month or longer, up to a maximum of one year. In this type of situation, the landlord/management company and the tenant may opt to sign the Amendment to the Lease Addendum which is a shortened version of the Lease Addendum. All documents pertaining to the leasing process shall be maintained in the participant’s file.

Subsidy Suspension. The HTF reasonable accommodation policy allows up to four months of suspension between housing for housing search, treatment, etc. During this time, a subsidy is not being paid on behalf of the program participant. After two months of suspension, notice will be provided to the participant that their assistance will be terminated at the end of the four-month period if they are not active on the program. 18-VII.G. ELIGIBLE UNITS AND PORTABILITY Families will be responsible for selecting their own rental housing. Families may locate suitable housing anywhere in Dakota County that meets Housing Quality Standards (HQS). HTF assistance is not portable to other jurisdictions. The following types of units are eligible for rental assistance: • Units owned or substantially controlled by an administrator, if:

o All the units in the development are available for occupancy by the general public; and

- 94 - o The rents are reasonable and do not exceed comparable units in the general market. The assisted units are to be subsidized only with HTF Program Rental Assistance funds; double subsidies are not allowed. • Manufactured homes, with rental assistance going toward rental payments for the unit and/or the lot. Rental assistance cannot be used for mortgage payments on manufactured homes. • Housing Cooperatives, so long as Minnesota Housing reviews and approves each tenant receiving assistance. • Units that were constructed with federal or state assistance such as Section 236 or Farmers Home Administration, if:

o The rents are the Basic Rent for the building; and o No other tenant-based subsidy (i.e., rent based on 30 percent of income) is provided. • HTF Rental Assistance cannot be provided for landlord-occupied units unless the tenant leases a portion of the unit, such as a basement, that contains a private entrance, bath and kitchen. • HTF Rental Assistance cannot be used for mortgage payments.

18-VII.H. HOUSING RELATED EXPENSES The CDA will only use HTF program funds for housing related expenses when there are no other resources available and without using program funds to cover the expense, the tenant will not be able to secure housing, or would create an episode of homelessness. Housing related expenses are limited to use one time per year. Security Deposits. Payment of a security deposit will be equal to, or less than one month’s rent. The security deposit (or a portion thereof, where applicable) may be retained by the household when: • The household is leaving a unit and the unit has no damages. • The household is leaving a unit, the unit has damages that are paid out of the security deposit, and a portion of the security deposit remains. • The household’s time-limited subsidy ends, but the household continues to live in the unit; or • The household receives a HCV and the Lease remains in place.

Application Fees, Utility Connection Fees, etc. The CDA may pay an application fee or utility reconnection fee and/or, other fees, as approved by Minnesota Housing that are necessary to obtain landlord participation or to prevent repeat episodes of homelessness when: • The tenant has exhausted all other mainstream resources such as emergency assistance, energy assistance, and/or local service organizations that usually provide financial assistance

- 95 - for such activities and the requested HTF payment will assist in getting a tenant into housing and/or prevent a future episode of homelessness for the tenant. 18-VII.I. SPECIAL HOUSING TYPES Homeownership is not an option under the HTF program. 18-VII.J. PROGRAM ADMINISTRATION The HTF program has no citizenship requirements. Applicants will be asked to provide Social Security cards, birth certificates and photo IDs. This request is so the information is available when/if the household transitions to a permanent subsidy, such as the HCV program, where this documentation is required. If an applicant does not have this information, their eligibility for the HTF program will not be impacted. The CDA will apply the policies of this Plan where the HTF Rental Assistance Program Guide is silent. However, MN Housing expects flexibility in program administration, therefore not all HCV regulations/policies will apply. For example, calculating annual income follows the Plan, but HTF participants are not given deductions, such as medical and childcare. 18-VII.K. TERMINATION OF RENTAL SUBSIDY Required Termination. The CDA must terminate Rental Assistance to a household when 30 percent of the household’s gross monthly income for four consecutive months equals or exceeds the Gross Rent. Optional Termination. • The CDA may terminate Rental Assistance if the household is evicted by its landlord for (1) serious or repeated violations of terms and conditions of its lease or (2) violation of any federal, state or local law that imposes obligation on the household in connection with occupancy or use of the unit in which the household resides. • The CDA may terminate a tenant’s rental subsidy, if the tenant fails to cooperate with the annual recertification process, including the HQS inspection. • The CDA may terminate Rental Assistance to a household if it does not receive future funding from Minnesota Housing under the HTF Program. Other Reasons for Termination. • Household Chooses To Move: If a household chooses to move, written notice must be given to the landlord and the CDA in accordance with the Lease. If the new rental unit is still in Dakota County and the household is still eligible for the HTF Program, the CDA must use the leasing procedures described in this policy to qualify the new unit. If the new rental unit is not in Dakota County, the CDA may terminate the household’s Rental Assistance. • Unit Does Not Meet HQS: If, at recertification, the CDA determines that the unit is not in compliance with HQS, the landlord must be given a reasonable time (generally, 30 days) to correct the deficiencies. The CDA may put the Rental Assistance on hold until the unit meets HQS. If the landlord fails to comply in a reasonable time, the CDA must notify the landlord and the household that Rental Subsidy payments will be suspended, and the rental subsidy contract terminated. If the household wishes to continue receiving Rental Assistance at a different location, they must use the leasing procedures described in this policy to qualify the new unit.

- 96 - • Transition Plans and Other Local Program Requirements: The HTF Program is a temporary program and requires that the CDA establish a plan for transitioning tenants off Rental Assistance. The transition plans should be flexible in nature, possibly changing over time to meet the individual needs of the tenant. The CDA cannot terminate the housing subsidy if a participant fails to cooperate with the terms of their service plan. The CDA can terminate and/or transition a household off the HTF rental assistance program once the household has been on the program for the maximum time limit, based on the program’s design. This time limit does not apply to eligible tenants who have applied for federal rental assistance but have not been accepted in such programs due to funding limitations, or who are ineligible for federal rental assistance. • Threats and/or Acts of Violence: The HTF program does not expect the CDA to tolerate threats and/or acts of violence from HTF Rental Assistance participants. Notice of Termination for Tenants. • If the CDA terminates a household’s Rental Assistance because the household’s income at recertification exceeds the limits set forth above, the CDA will provide written notice to both the household and the landlord that the Rental Assistance will end on the last day of the second month following the month in which the notice is given. A tenant shall be given an opportunity to meet with the CDA and submit any information documenting their income did not exceed the limits and justifies continuing the subsidy. • If the CDA gives notice to terminate a tenant's rental subsidy because the tenant is being evicted the CDA will provide written notice to both the tenant and the owner or management agent that the rental subsidy will end on the last day of the month in which the tenant vacates the unit. • If the CDA gives notice to terminate a tenant’s rental subsidy because the tenant is not cooperating with the annual recertification process, which may include the annual HQS inspection, the CDA will submit written notice to the tenant and owner or management agent that the tenant has 60 days to comply with recertification requirements. If the tenant does not comply with recertification requirements within 60 days, the CDA will submit written notice to the tenant and owner or management agent that the rental subsidy will end on the last day of the month in which the tenant receives the notice. • If the CDA gives notice to terminate a tenant's subsidy for reasons outlined in items A, B and C, the tenant shall be given an opportunity to meet with the CDA to determine if the conditions causing possible termination can be resolved and the tenant can continue receiving the subsidy.

- 97 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Approval Of Record Of Disbursements – November 2020

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Finance Amount included in current budget Prepared By: Chris Meyer Budget amendment requested Contact: Ken Bauer FTE included in current complement Contact Phone: 651-675-4450 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Approve Record of Disbursements for November 2020.

SUMMARY In November 2020, the Dakota County Community Development Agency (CDA) had $4,830,364.60 in disbursements and $433,524.60 in payroll expenses. Attachment A provides the breakdown of disbursements. Additional detail is available from the Finance department.

RECOMMENDATION Staff recommends approval of the Record of Disbursements for November 2020.

EXPLANATION OF FISCAL/FTE IMPACT These disbursements are included in the Fiscal Year Ending June 30, 2021 budget.

- 98 - Supporting Documents: Previous Board Action(s): Attachment A: Record of Disbursement – November 2020

Resolution No. 20-XXXX

Approval Of Record Of Disbursements – November 2020

BE IT RESOLVED, by the Dakota County Community Development Agency Board of Commissioners, That the November 2020 Record of Disbursements is approved as written.

______Executive Director Department Director

- 99 - 4A - Attachment A Dakota County CDA Record of Disbursements For the month of November 2020

Date Amount Total Common Bond Fund 11/20/20 $ 92,813.99 $ 92,813.99 Disbursing 11/01/20 $ 80,622.00 11/05/20 $ 847,782.29 11/12/20 $ 380,192.41 11/19/20 $ 940,758.84 11/25/20 $ 433,874.86 $ 2,683,230.40 Housing Assistance 11/01/20 $ 1,871,943.10 11/12/20 $ 151,377.11 $ 2,023,320.21 Tax Increment Financing 11/18/20 $ 31,000.00 $ 31,000.00

Total Disbursements $ 4,830,364.60

November 2020 Payroll 11/06/20 $ 216,443.32 11/20/20 $ 217,081.28 Total Payroll $ 433,524.60

Disbursement detail is available in the Finance Office

- 100 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Authorization To Carryforward Unused 2020 Private Activity Bond Volume Cap

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Community & Economic Development Amount included in current budget Prepared By: Kathy Kugel Budget amendment requested Contact: Lisa Alfson FTE included in current complement Contact Phone: 651-675-4467 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Authorize the carryforward of unused 2020 private activity bond volume cap for qualified residential rental housing and for qualified mortgage credit certificates (owner housing).

SUMMARY The Dakota County Community Development Agency (CDA) receives an annual “entitlement” allocation of bond volume cap to issue private activity bonds pursuant to Minnesota Statutes, Section 474A.03, Subd. 2(a). The bond allocation amount is based on population and a per capita maximum amount. The entitlement allocation may be used within the year it is allocated for qualified residential rental housing or qualified mortgage bonds/mortgage credit certificates (owner housing). Under Section 146 of the Internal Revenue Code and Minnesota Statutes, Chapter 474A, any amount of the volume cap not used in the current entitlement year may be “carried forward” and used within three calendar years; however, carried forward amounts must be designated for either rental housing or owner housing purposes.

As an entitlement issuer, in 2020 the CDA received an allocation of $26,642,126 private activity bond volume cap. Following the issuance of $28,000,000 of the 2018 and 2019 carryforward for the Aster House project in Eagan, which is scheduled to occur on December 22, 2020, the CDA will have $8,651,842 of 2019 carryforward volume cap and $26,642,126 of 2020 volume cap remaining. This remaining amount has been designated for the Legacy Commons at Signal Hills senior project in West St. Paul and to the extent there is any volume cap remaining, to the Hilltop at Signal Hills project in West St. Paul. Each of the projects anticipates issuing a multifamily housing revenue note in early January 2021.

The following table shows the CDA’s carryforward amounts that were carried forward for rental housing purposes, as well as the remaining 2020 volume cap and how the CDA proposes to carry it forward.

Aster Expected Legacy Commons House End of 2020 at Signal Hills Expected (Eagan) Balance (West St. Paul) 2020 Balance 2018 and 2019 Carryforward $28,000,000 $8,651,841 $8,651,842 $0 2020 Volume Cap $0 $26,642,126 $26,642,126 $0 Total $28,000,000 $35,293,967 $35,293,967 $0

RECOMMENDATION Staff recommends adopting the resolution providing any unused 2020 volume cap allocation be carried forward for the purpose of qualified residential rental projects.

EXPLANATION OF FISCAL/FTE IMPACT Approving this carryforward authorization will allow the CDA to retain access to the unused bonding allocation from 2020 for future issuance through the end of 2023.

- 101 - Supporting Documents: Previous Board Action(s): 20-6331 (10/20/2020); 20-6344 (11/17/2020); 20-6345 (11/17/2020)

Authorization To Carryforward Unused 2020 Private Activity Bond Volume Cap

WHEREAS, as an entitlement issuer, within the meaning of Minnesota Statutes, Section 474A.02, Subd. 7, the Dakota County Community Development Agency (CDA) has received an allocation of 2020 private activity bond volume cap in the amount of $26,642,126 (“2020 Volume Cap”); and

WHEREAS, pursuant to §146(f) of the Internal Revenue Code of 1986, as amended (“Section 146”), the CDA may carryforward all 2020 Volume Cap remaining unused at the end of 2020 (“Unused 2020 Volume Cap”) for use within the next three calendar years for a specified carryforward purpose;

WHEREAS the CDA intends to carryforward its Unused 2020 Volume Cap remaining on December 31, 2020, for qualified carryforward purposes.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, as follows:

1. The CDA hereby carries forward its Unused 2020 Volume Cap for the purpose of providing qualified residential rental projects.

2. The CDA hereby elects to carryforward its Unused 2020 Volume Cap for such purposes and authorizes and directs the Executive Director to execute and cause to be filed with the IRS a Form 8328 specifying the amount of Unused 2020 Volume Cap and the foregoing carryforward purposes. Form 8328 shall be filed with the IRS on or before February 15, 2021. The Executive Director is further authorized to notify Minnesota Management and Budget of such carryforward at such time and as required by Minnesota Statutes, Chapter 474A.

______Executive Director Department Director

- 102 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Scheduling Of A Public Hearing Regarding The Disposition Of Property In Rosemount

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Housing Development Amount included in current budget Prepared By: Lori Zierden Budget amendment requested Contact: Kari Gill FTE included in current complement Contact Phone: 651-675-4477 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Setting a public hearing date of January 19, 2021 regarding the disposition of property located in Rosemount.

SUMMARY The Dakota County Community Development Agency (CDA) owns Cambrian Commons and the underlying land in Rosemount. The State of Minnesota (Minnesota Department of Transportation) needs to acquire 120 square feet of new right-of-way on the subject property. The acquisition is needed for safety related improvements including repair of an existing sidewalk and upgrades to the existing handicap ramp in order to meet current Americans with Disability Act standards.

This potential land sale is proceeding under Minnesota Statute 469.029 Subd 3 by which the CDA may transfer by deed to local public bodies [of] those pieces of property which, in accordance with the redevelopment plan, are to be devoted to public uses, other than public housing or redevelopment purposes.

The public hearing was originally scheduled for the December meeting, but the notice was not published per the required timeline in the approved Resolution. This revised schedule works with MnDOT’s schedule.

RECOMMENDATION Staff recommends setting a public hearing for Tuesday, January 19, 2021 for the purpose of considering the sale of land to the State of Minnesota for new right-of-way purposes.

EXPLANATION OF FISCAL/FTE IMPACT N/A

- 103 - Supporting Documents: Previous Board Action(s): Attachment A: Parcel Sketch #20-6339; (11/17/2020) Attachment B: Public Notice

Resolution No. 20-XXXX

Scheduling Of A Public Hearing Regarding The Disposition Of Property In Rosemount

WHEREAS, the Dakota County Community Development Agency (CDA) owns Cambrian Commons and the underlying property located in Rosemount, Minnesota; and

WHEREAS, the State of Minnesota has approached the Dakota County CDA to purchase 120 square feet improve safety of sidewalk and upgrade the existing handicap ramp in order to meet current Americans with Disability Act standards; ands

WHEREAS, Minnesota Statutes 469.029 Subd 3, by which the CDA may transfer by deed to local public bodies [of] those pieces of property which, in accordance with the redevelopment plan, are to be devoted to public uses, other than public housing or redevelopment purposes.

NOW, THEREFORE, BE IT RESOLVED by the Dakota County Community Development Agency Board of Commissioners, That:

1. A public hearing regarding the disposition of the approximate 120 square feet of Lot 1, Block 1 Cambrian Senior Housing a CDA property located on Robert Trail South at Lower 147th Street West in Rosemount will be held by the CDA Board on January 19, 2021 at or after 3:30 p.m. at the CDA’s office.

______Executive Director Department Director

- 104 - Exhibit A 4C - Attachment A

- 105 - 4C - Attachment B

PUBLIC NOTICE

Dakota County Community Development Agency

Notice is hereby given that the Board of Commissioners of the Dakota County Community Development Agency (CDA) will hold a public hearing on Tuesday, January 19, 2021 beginning at 3:30 p.m. to consider the sale, transfer and/or exchange of property currently owned by the CDA. The Dakota County CDA Board of Commissioners will hold this hearing at the CDA offices located at 1228 Town Centre Drive, Eagan, Minnesota. At the hearing, the CDA will meet to decide if the sale is advisable.

The proposed parcel to be sold, transferred and/or exchanged is hereby described as:

That part of Lot One (1), Block One (1), lying westerly of the following described line and its southerly extension: Commencing at the northeast corner of said Lot One (1); thence running westerly along the north line of said lot 149.58 feet; thence southerly to a point 150.96 feet westerly of the southeast corner of said Lot One (1), all in Cambria Senior Housing, according to the recorded plat thereof.

Which is located on the northwest corner of the site on Highway 3 and Lower 147th Street in Rosemount.

Persons seeking more information on this proposed sale, transfer and/or exchange of property should contact Lori Zierden at the Dakota County CDA, 1228 Town Centre Drive, Eagan, MN 55123, telephone (651) 675-4479. Public comments may be submitted orally or in writing to the CDA through the public hearing held on January 19, 2021.

- 106 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Adoption Of The 2021 CDA Merit Compensation Policy And Plan

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Administration Amount included in current budget Prepared By: Sara Swenson Budget amendment requested Contact: Sara Swenson FTE included in current complement Phone: 651-675-4433 New FTE(s) requested Other

PURPOSE/ACTION REQUESTED • Adopt the 2021 CDA Merit Compensation Policy and Plan.

SUMMARY Each year, the CDA reviews the agency’s Merit Compensation Policy and Plan (Attachment A) and makes recommendations for the upcoming year. This year, as in years past, CDA staff has reviewed and is recommending a compensation plan that is similar to Dakota County’s approved plan, with some modest variations for consistency with CDA operations and goals.

The 2021 salary structure reflects a 2% increase over the 2020 salary structure. This is the same salary structure as Dakota County.

The merit matrix provides for a combination of 0.0% to 1.0% base and 0.0% to 3.0% lump sum adjustments.

The Stand-by rate increased by 0.05 cents per hour.

STAFF RECOMMENDATION Staff recommends adoption of the 2021 Merit Compensation Policy and Plan.

EXPLANATION OF FISCAL/FTE IMPACT The CDA’s budget year runs from July 1 to June 30 of the following year. The compensation plan is based on a regular calendar year, and therefore the Merit Compensation Policy and Plan cuts across two fiscal years. The current fiscal year’s budget included estimates that will accommodate the proposed salary increases that will occur in the first half of the calendar year, and the budget for the upcoming fiscal year can be adjusted prior to its approval.

- 107 - Supporting Documents: Previous Board Action(s): Attachment A: 2021 CDA Merit Compensation Policy and Plan

Resolution No. 20-XXXX

Adoption Of The 2021 CDA Merit Compensation Policy And Plan

WHEREAS, the CDA wishes to maintain organizational consistency and promote compensational equity between CDA employees and those of other public agencies; and

WHEREAS, the Dakota County CDA Board implemented the "CDA Merit Compensation Plan" (the "Plan") on January 1, 1993, to provide a performance-based salary review program for CDA employees; and

WHEREAS, the Plan requires that the CDA Board annually adopt a merit matrix and salary structure.

NOW, THEREFORE, BE IT RESOLVED, by the Dakota County Community Development Agency Board of Commissioners, That the 2021 CDA Merit Compensation Policy and Plan, Pay Equity Structure, and Merit Matrices be adopted for implementation on January 1, 2021; and

BE IT FURTHER RESOLVED that CDA employees' performance evaluations for 2021 will occur in the context of and consistent with the Plan and that the Human Resources Administrator is hereby directed to incorporate the provisions adopted herein into the 2021 Merit Compensation Policy and Plan document and related Personnel Policies.

______Executive Director Department Director

- 108 - 4D - Attachment A

20210

Merit Compensation Policy & Plan

- 109 -

Merit Compensation Policy & Plan

I. INTRODUCTION

The Dakota County Community Development Agency’s philosophy regarding compensation systems and wage and salary administration flows from a belief that all employees are to be provided competitive rewards for achievement. Embodied in this statement are the concepts of output or results-based merit pay in the context of market driven compensation structures. Contained within this broad statement are the CDA’s compensation goals, including: 1) attraction and retention of personnel, 2) rewards for excellence, 3) facilitation of compensation equity, 4) equitable distribution of limited CDA compensation resources, 5) achievement of pay/performance and contribution relationships, 6) possibility of salary differentiation from the highest to the lowest level of performance and contribution, and 7) clear communication of these objectives to all affected employees. The elements of the CDA’s compensation program have been structured to support and advance these objectives.

II. ADMINISTRATIVE GUIDELINES

A. Participation

All CDA employees will participate in the Dakota County CDA Merit Compensation Plan. New employees will participate immediately upon employment.

B. Plan Update

The Administration Department will annually review all aspects of the Plan, including salary ranges and grade structure, salary increase matrixes, and administrative guidelines. Any recommended changes due to internal organization modifications, external market factors, strategic programmatic and administrative considerations, or other relevant issues will be proposed to the CDA Board in a timely fashion.

III. COMPENSATION PROGRAM ELEMENTS

A. Policy

It is the policy of the CDA to provide its employees equitable compensation and financial incentives, to the extent permitted by law, to promote attainment of the highest levels of performance and organizational contribution. The CDA recognizes that compensation policies are a key factor in the CDA's ability to attract, retain and motivate well-qualified individuals to participate in the achievement of its objectives. Therefore, the Dakota County CDA Merit Compensation Plan is based on the principles of internal and external pay equity and is designed to relate to the extent possible, an individual’s salary to performance and contribution to organization results.

- 110 -

B. Salary Structure

The CDA salary structure (Attachment A) consists of 18 salary grades with a corresponding salary range for each grade. Salary ranges are formulated around a midpoint, and a salary range spread is calculated. Salary ranges are segmented into four quartiles. The structure is midpoint-driven which means the market rate for CDA positions is approximately the midpoint of the salary ranges. Market rate is defined as what comparable jurisdictions are actually paying employees in comparable positions. Movement beyond the market rate is dependent upon high performance ratings and tenure in position.

Salary ranges are analyzed and may be adjusted each year based on a number of factors including relative changes in the labor market, inflationary measures, budgetary impact as well as fluctuation in the prevalence of certain job skills in the marketplace.

C. Performance Reviews

With the exception of Back-up Site Attendants and Site Attendant B’s Relief Caretakers, supervisors shall conduct a formal performance review of each employee annually to determine whether the employee shall receive a merit increase. Any merit increase will be effective as of the employee’s performance review date. For Back-up Site Attendants and Site Attendant B’s Relief Caretakers, a notice will be sent to the supervisor indicating that an automatic Meets Standards performance rating and increase will be calculated on the review date, unless the supervisor submits a performance review rating to the contrary.

In preparing a formal performance review, a supervisor assesses an employee’s performance and contribution on major job duties and accomplishment of objectives for the position being evaluated. Areas needing improvement are identified and when appropriate, a formal performance improvement plan is implemented.

The formal performance review is conducted within 15 days of employee’s annual performance review date. Prior to the conclusion of the evaluation period, employees are expected to complete a self-assessment and submit it to their supervisor for use in completing their performance review. At the discretion of management, a supervisor’s salary increase may be delayed until all scheduled performance reviews are completed.

Completed performance review documents are signed by the supervisor, the employee and the Department Director. The Department Director or the Assistant Department Director can sign off on completed review documents for Site Attendants. The employee’s signature indicates that the appraisal has been discussed with the supervisor, but does not necessarily indicate agreement with document content. Employees shall be provided adequate time to review and provide summary comments to the final review document. If an employee refuses to sign the document, it is so noted and the review is processed. Completed performance review documents are retained by Human Resources consistent with Administration’s retention schedule and related policies. A copy of the performance review is provided to the employee.

At least once during the review period, it is recommended that the supervisor also conduct an informal review to inform the employee of the interim performance status. Interim reviews are documented in dated summary memos and maintained by the department.

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The performance review process combines an assessment of objective success measures and position competencies.

Performance ratings are based on the following structure:

Greatly Exceeds Performance Standards - is reserved for a limited number of employees who, in a given year, demonstrate extraordinary performance. This rating may result from especially noteworthy accomplishments and/or performance during the review period that exemplifies organizational excellence. Approval of the Executive Director is required for this level of rating.

Exceeds Performance Standards - is to recognize a pro-active performer. Results of assigned responsibilities consistently meet and frequently exceed baseline expectations. Routinely evaluates priorities and maximizes opportunities for improvement and collaboration; is pro-active and effective in performing for group success, integrating change, learning and sharing information, understanding and sustaining organizational values and objectives; serves as an example of professionalism and excellence.

Meets Performance Standards - is to recognize a reliable, responsive performer. Results of assigned responsibilities meet baseline expectations, regularly or with minimal training or coaching. Takes the steps needed to accomplish tasks, can integrate change as proscribed, complies with group needs while performing individual tasks, and can learn and apply specified information when necessary. Demonstrates conduct appropriate for the workplace and acts consistently within organizational values and objectives.

Learning Performance Standards - performance in assigned responsibilities does not meet baseline expectations due to either an insufficient length of time in position or lack of skill or effort; May require regular assistance, training, coaching or oversight to complete basic/routine job responsibilities.

Employees who receive a Learning Performance Standards rating are subject to a Performance Improvement Plan and an informal review after six months. If performance standards are not brought up to a Meets Standards, the employee will be subject to disciplinary proceedings, up to and including discharge.

Below Performance Standards - does not achieve baseline performance expectations due to insufficient skill or effort. Results of some or all assigned responsibilities fail to meet baseline expectations. Frequently requires assistance, coaching or regular oversight to complete basic/routine job responsibilities. May be inconsistent in the demonstrated ability to adapt to change and apply new information to assigned tasks or roles and their performance may slow or damage group productivity, functioning or credibility.

Employees who receive a Below Standards rating are subject to a Performance Improvement Plan and will receive formal performance reviews at six-month intervals until documented performance warrants a Meets Standards rating. If after the six-month review the employee receives a Meets Standards or above rating, a six-month merit increase is processed and the next review date is adjusted back to the annual or common review date. Employees who receive multiple or consecutive Below Standards ratings will be subject to disciplinary proceedings, up to and including discharge.

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D. Individual Development Plans

As part of the formal performance review process, supervisors and employees are encouraged to jointly complete an Individual Development Plan (IDP). Formal discussions of job and career objectives, position enrichment and development may also be included. The development areas and career objectives identified should be tied to departmental and agency-wide goals. Completion of an IDP is required if the employee is planning to request tuition reimbursement.

IDP’s are not required of Site Attendants or Back-up Site AttendantsCaretakers or Relief Caretakers.

E. Salary Increase Matrix

The Merit Matrix is based on the principle that salary range position and performance as reflected in organizational contribution bear a direct relationship and that gravitation toward the market rate (Q2) should occur.

The structure of the annual merit matrix (Attachment B) reflects percentage increases based on two dimensions: range position (Quartiles 1 – 4) and performance rating. When a merit increase is available, a high performer in a low segment of the salary range may receive a greater base salary increase than an equivalent performer in an upper portion of the salary range. Note that employees whose performance is rated Below Standards, are in no case eligible for an increase to base salary or a lump sum payment. In no instance will an employee’s base salary be increased above the range maximum.

Administering an effective performance-based market system requires a commitment to truly differentiate performance. There is no expectation that every employee will reach the salary range maximum. Appropriate ratings differentiation is expected. Those employees who perform at higher levels receive greater rewards.

F. Special & Extra Meritorious Awards

The Special and Extra Meritorious Awards provide discretionary lump sum payments for special achievements with short-term and review period recognition options.

Special Awards provide short-term based recognition that is directly tied to a specific, identified achievement for employees who are critical to the success of a specific project. An award of up to $500 may be granted for short-term recognition.

The Extra Meritorious Award is provided at the end of a performance review period for notable achievement accomplished throughout the year, and/or special achievements outside the normal expectations of the employee’s position. Employees are eligible for an Extra Meritorious Award once per calendar year. The Extra Meritorious Award provides a lump sum payment of up to 2% of the employee’s salary.

Special and Extra Meritorious Awards are approved or disapproved by the Executive Director after consultation with Human Resources.

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G. Promotion

A promotion is defined as the selection of an internal candidate through the competitive process into a position at a higher salary range or classification.

Upon promotion, employees are eligible for an increase of up to 10% of their actual base salary, or placement at the new salary range minimum, whichever is greater. If the employee’s resulting base salary is below Quartile 2 of the new salary range, internal equity and the employee's appropriate placement within the salary range may be considered when implementing a promotional salary action and an additional increase may be proposed. All promotional salary actions require approval by Human Resources.

Employees promoted into a supervisory position will typically not earn less than 90% of the highest paid subordinate employee in the work unit unless unique circumstances exist.

All promotional salary increases will be approved by Human Resources and reviewed with the Department Director prior to a promotional job offer being extended.

H. Demotion

 Involuntary An involuntary demotion is defined as a reassignment from one position to another, which has a lower salary range or classification as a result of a performance-based consequence or other disciplinary procedure. The employee’s salary review date will be adjusted to the effective date of the action. The employee’s salary is subject to adjustment on a case-by-case basis as approved by Human Resources.

 Voluntary A voluntary demotion is defined as the selection of an internal candidate through the competitive process into a position at a lower salary range or classification. The employee’s salary review date will be adjusted to the effective date of the action. The employee’s salary reduction will generally be no greater than 10% of their base pay per pay grade reduced. Adjustments will be based on internal equity considerations and approved by Human Resources.

 Reorganization If a demotion is the result of a reorganization or unforeseen organization or structure changes and if the affected employee’s salary is above the new salary range maximum, the salary is frozen until such time as the salary is within the new salary range.

I. Job Evaluation

Through the CDA’s job evaluation and classification policy, the agency ensures that appropriate relationships between classifications and jobs are established and maintained over time through application of a periodic job description review process and reorganization studies, when appropriate.

J. Reclassification

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A reclassification is defined as movement to another salary grade as a result of approved changes in job duties significantly modifying the position responsibilities. When a position is reclassified to a higher salary grade, employees are eligible for an increase of up to 5% of their actual base salary or placement at the new salary range minimum, whichever is greatest.

The CDA ensures that job descriptions are evaluated regularly, and as changes to services, processes, and related job duties occur. If a position is re-evaluated by the agency’s external consultant, it will receive a ranking and will be slotted on the existing compensation schedule.

Positions may be reclassified with no change in salary grade, upward (higher classification/salary grade) or downward (lower classification/salary grade). In instances of a reclassification upward, the Executive Director shall have the authority to grant a salary increase in accordance with Personnel Policy #260.

Reclassification downward generally results in no immediate change to the employee's salary. When the employee's salary is within the new salary range, the employee will be eligible for performance increase consideration based upon the new salary control point on the annual performance review date. Reclassification of a position does not change the employee's salary review date unless specifically determined during the reclassification process.

When downward reclassification results in an employee's salary exceeding the maximum of the new salary range, the salary is not increased for any reason, including performance reviews, until such time that the salary is within the designated salary range.

K. Working Out-of-Class

Out-of-class pay may be requested whenever an employee is designated by the responsible authority to perform all or a majority of the duties and responsibilities of a position in a higher classification for a period of 10 consecutive work days or more. For this purpose, higher classification is defined as at least one subgrade above the employee's current classification. Human Resources must review all requests for out-of-class work prior to the employee’s assignment. Whenever possible, out-of-class assignments should be limited to a period of six months or less, but may be extended with approval. Generally, working out-of-class is the result of a temporarily vacant position.

In such a case and for the duration of the out-of-class assignment, the employee is eligible for a payment of up to 5% of their actual base salary, or placement at the higher salary range minimum, whichever is greater. The out-of-class payment will be retroactive to the first day the employee worked in the higher classification and may be paid as an adjustment to the hourly rate or paid in a lump-sum at the conclusion of the out-of-class assignment. Employees being considered for an out-of-class assignment must meet the minimum qualifications of the position in the higher classification.

Whenever an employee is directed to temporarily perform most, but not all, of the duties and responsibilities of a position in a higher salary grade as defined above for a period of 10 consecutive work days or more, the employee is eligible for a partial out-of-class payment of up to 3% of their actual base salary to be paid in a lump-sum as indicated in paragraph two of this section.

If an employee's review date occurs during the time they are working out-of-class, a salary adjustment consistent with the Merit Compensation Plan is computed on the employee's

- 115 -

regular position, classification, and salary range. The calculated increase is then added to the out-of-class pay rate. When the employee returns to their regular position, they are compensated at their previous rate plus the amount of any increase. An employee working out-of-class for six months or more is not eligible for a probationary review.

If the employee is promoted to the out-of-class position, the date of the promotion will be considered the effective date of change and they will then serve a six month probation period. The salary of the promoted employee shall be no less than the rate of pay while serving in the out-of-class assignment.

L. Career Ladder Program Advancement

Career Ladder Program Advancement offers advancement opportunity within a series of related classifications designated as a Career Ladder. A Career Ladder is defined as a series of two or more classifications listed in ascending level of responsibility, with increasingly complex duties and higher salary potential. Positions eligible for consideration as a Career Ladder will be identified through review by Senior Management and advancement criteria will be developed in consultation with Human Resources. All Career Ladder series are subject to Executive Director approval, prior to their implementation.

Management requests for a subordinate’s Career Ladder advancement, occurs in conjunction with an employee’s regularly scheduled performance review date. Career Ladder advancement requests must be documented and receive Department Head and Executive Director approval. An employee approved for a Career Ladder advancement receives a performance review salary adjustment based on the control point of the classification assigned during the previous review period as described in Section C. Additionally, in recognition of the career advancement, employees are then eligible for an increase of 3% of their actual base salary, 3% of the applicable salary range or career-band control point, or placement at the new salary range minimum, whichever is greatest.

M. On-Call Compensation

Property Management Department staff may be assigned, for one-week periods (seven consecutive days), to be on on-call before and after their regular work hours, on weekends, and on holidays. On-call staff are expected to be available to handle maintenance-related emergencies and calls as described in the Stand-By Compensation section of Personnel Policy #170.

Staff who are scheduled to be the primary on-call employee will be paid at a rate of one-and- a-half (1.5) times their regular rate of pay for all hours actually worked while on-call (including work-related phone time), and will also be paid a separate stipend for each week of primary on-call service performed. Primary on-call service will receive a rate of $2.1005 per hour for each hour they are designated on-call.

A supervisor or different Property Management staff member will be assigned, for one-week periods (seven consecutive days), to provide secondary (back-up) on-call support and assistance to the primary on-call employee on an as-needed basis. Employees who provide secondary on-call support and assistance will be paid at their regular rate of pay for all hours actually worked while on-call and will also be paid a separate stipend for each week of back-

- 116 -

up on-call service performed. Back-up on-call service will receive a rate of $1.3025 per hour for each hour they are designated on-call.

Overtime compensation for on-call staff will be calculated and paid in accordance with applicable law.

Wage and Salary Guidelines

 Full Merit Concept All employee base and lump sum salary actions are based solely on the CDA’s approved Merit Matrix and related guidelines. All salary actions are effective on employees’ performance review dates.

 Merit Matrix The Merit Matrix guidelines provide percentage base and lump-sum increases for each level of performance. The merit increase is a percentage calculated on the Q2 rate of the employee’s applicable salary range if the salary is below the Q2 rate, and calculated on the employee’s base salary if above the Q2 rate.

For employees below the range maximum and whose base adjustment would result in an increase above the salary range maximum, the salary increase is available only to the range maximum rate. There are no base or lump sum increases beyond the range maximum.

Note: Part-time employees receive base adjustments and lump sum payments based upon and prorated by their approximate full-time equivalency amount. For example, a 20- hour per week, .5 FTE employee would receive one-half of the calculated annual or lump sum amounts using the method above.

 Performance Review Date The performance review date has historically been the date on which the employee was last hired, transferred, promoted or demoted to a new job classification or a specified common date applicable to a group of employees. Departments are strongly encouraged to move employees to common review dates in order to more equitably evaluate performance across work units. If an employee’s performance review date is to be changed, the employee will receive written notice. Additionally, performance review dates will be adjusted for employees on approved leaves of absence beyond 90 days.

 Effective Dates of Increases All pay increases will be effective on the employee's performance review date. In the event that an employee’s review is not conducted until some time after that employee's official performance review date, any pay increase will be retroactive to that date.

 Six-Month Probationary Performance Reviews

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Six-month probationary performance reviews are based on the plan year merit guidelines within which they fall. Using matrix guidelines for base adjustments and lump sum payments, 50% of the available increase is provided upon successful completion of the initial probationary period. At the subsequent annual review, an additional 50% of an increase is available, based on current performance level and matrix guidelines.

 Salaries Below the Range Minimum At the beginning of a calendar year, any employee compensated at a rate less than the minimum of the new applicable salary range as defined in this policy, will be automatically adjusted to the new range minimum.

 Increases to the Top of the Range No employee's salary may exceed the range maximum. A base increase may be given up to the maximum. There are no base or lump sum payments if an employee’s salary is at the salary range maximum rate.

N. Approval Process

All performance review and salary increase materials and documentation require the approval signatures of the appropriate supervisor and department director. After appropriate Department approval, all documentation is forwarded to the Human Resources Administrator (or designee) for final approval and processing. Prior approval of the Executive Director is required for a Greatly Exceeds Performance Rating, and Special or Extra Meritorious Awards.

O. Market Adjustment

The Executive Director may approve a market analysis for a job classification as requested by a department head or initiated by the Human Resources Administrator. When a market analysis for a specific job class indicates that the assigned salary range mid-point deviates, positively or negatively, from the market by more than 10%, the job class may be placed at an established salary range that most closely corresponds to the applicable market rate. The job class is administered in the context of the adjusted range. All market adjustments will be re- evaluated on a regular basis.

P. Modifications or Exceptions

The Executive Director may approve exceptions to the Plan. These will generally involve internal and labor market equity considerations, HUD compliance or unusual circumstances and will occur only upon the recommendation of the Director of Administration.

Q. Policy Implications

The provisions of this plan supersede any applicable Dakota County CDA policies and procedures.

Attachments: A. Pay Equity Compensation Structure B. Merit Matrix C. Job Classifications

- 118 - ATTACHMENT A 2021 DAKOTA COUNTY CDA PAY EQUITY COMPENSATION STRUCTURE

Grade Minimum Quartile 1 Midpoint Quartile 3 Maximum

100 $25,308 $28,472 $31,635 $35,590 $39,544

101 $28,345 $31,888 $35,431 $39,860 $44,289

102 $31,746 $35,715 $39,683 $44,644 $49,604

103 $35,556 $40,001 $44,445 $50,001 $55,556

104 $39,822 $44,800 $49,778 $56,001 $62,223

105 $44,601 $50,176 $55,751 $62,720 $69,689

106 $49,953 $56,197 $62,441 $70,246 $78,051

107 $55,947 $62,941 $69,934 $78,676 $87,418

108 $62,661 $70,494 $78,326 $88,117 $97,908

109 $70,180 $78,953 $87,725 $98,691 $109,656

110 $78,602 $88,427 $98,252 $110,534 $122,815

111 $88,034 $99,038 $110,042 $123,798 $137,553

112 $98,598 $110,923 $123,247 $138,653 $154,059

113 $110,430 $124,234 $138,037 $155,292 $172,546

114 $123,681 $139,141 $154,601 $173,926 $193,251

115 $138,522 $155,838 $173,153 $194,797 $216,441

116 $155,145 $174,538 $193,931 $218,173 $242,414

117 $173,762 $195,483 $217,203 $244,354 $271,504

Shaded salaries exceed the 2021 Local Government Salary Cap and are currently unavailable to CDA employees.

- 119 - ATTACHMENT B DAKOTA COUNTY CDA MERIT COMPENSATION PLAN

2021 Merit Matrix

The Merit Matrix guidelines provide maximum recommended percentage increases for each level of performance and for each of the four salary quartiles. All below Q2 salary actions are a percentage of the Q2 rate. All above Q2 salary actions are a percentage of the employee’s base salary.

PERFORMANCE RATING

GREATLY RANGE EXCEEDS MEETS LEARNING BELOW EXCEEDS POSITION STANDARDS STANDARDS STANDARDS STANDARDS STANDARDS aclt nEpoe’s Base Calculate on Employee’

1% base + 1% base + 1% base + Q4 3.0% lump 2.0% lump 1.0% lump 1% base 0% sum sum sum

1% base + 1% base + 1% base + Q3 1% base 0% 3.0 lump sum 2.0 lump sum 1.0 lump sum

Salary range midpoint/ Q2 Calculate on midpoint/Q2

1% base + 1% base + 1% base + Q2 1% base 0% 3.0 lump sum 2.0 lump sum 1.0 lump sum

1% base + 1% base + 1% base + Q1 1% base 0% 3.0 lump sum 2.0 lump sum 1.0 lump sum

- 120 - ATTACHMENT C: JOB EVALUATION/CLASSIFICATION RANKING (As of 1/2021)

JOB CLASSIFICATION STATUS GRADE

Deputy Executive Director/Dir. of Housing Development E 113

Director of Administration & Communications E 112 Director of Community & Economic Development E 112 Director of Finance E 112 Director of Housing Assistance E 112 Director of Property Management E 112

Assistant Director of Administration & Communications E 110 Assistant Director of Community & Economic Development E 110 Assistant Director of Finance E 110 Assistant Director of Housing Assistance E 110 Assistant Director of Property Management E 110 Maintenance Manager E 110

E 109 Housing Finance Program Coordinator E 109 Human Resources Administrator E 109 Network Administrator E 109 Program Manager E 109

Capital Projects Manager E 108 Community Development Coordinator E 108 Compliance & Landlord Relations Manager E 108 Facilities Contract Manager E 108 Property Manager E 108 Senior Accountant E 108 Software Administrator E 108

Administrative Coordinator N 107 Housing Rehabilitation Coordinator N 107 Housing Rehabilitation Specialist N 107 Maintenance Technician III N 107 Real Estate Specialist E 107 Weatherization Coordinator N 107

Accountant N 106 Maintenance Technician II N 106

Assistant Property Manager N 105 First Time Homebuyer Specialist N 105 Homeownership Specialist N 105 Housing Specialist N 105 Maintenance Technician I N 105 Weatherization Specialist N 105

Accounting Specialist N 104 Housing Quality Standards Inspector N 104 Preventative Maintenance Technician N 104

Program Support Assistant N 103

Office Support Assistant N 102

Site Attendant N 101

Site Attendant – Back Up N 101

E = Exempt N = Non-Exempt

- 121 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Approval Of Amendments To The Lincoln Place Admissions And Continued Occupancy Policy

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Property Management Amount included in current budget Prepared By: Anna Judge Budget amendment requested Contact: Anna Judge FTE included in current complement Contact Phone: 651-675-4501 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Approve amendments to the Lincoln Place Admissions and Continued Occupancy Policy (ACOP).

SUMMARY Lincoln Place is a supportive housing development for young adults between the ages of 18-24 who were homeless or at-risk of becoming homeless.

Staff are requesting that the following changes to be made to the building’s ACOP.

1. Increase Security Deposit amount from $350 to $500. 2. Update inspection policy for CDA Levy assisted units to align with current Housing Choice Voucher Housing Quality Standards policies requiring an inspection at least once every 24 months, versus the current annual inspection. 3. Additionally, to align with Housing Assistance policies, increase the dollar amount Levy assisted units are required to report a monthly income increase in between annual recertification dates from $200 to $500 per month.

RECOMMENDATION Staff recommends approval of these amendments to the Lincoln Place Admissions and Continued Occupancy Policy that are consistent with other agency policies and standards.

EXPLANATION OF FISCAL/FTE IMPACT None.

- 122 - Supporting Documents: Previous Board Action(s): Attachment A: Lincoln Place ACOP changes

Resolution No. 20-XXXX

Approval Of Amendments To The Lincoln Place Admissions and Continued Occupancy Policy

WHEREAS, the Lincoln Place Admissions and Continued Occupancy Policy has been revised and specific changes have been made to include an increase in Security Deposit upon admittance to the program, changes to required inspections on Levy assisted units, and aligning reporting requirements when a household experiences an income change.

NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Dakota County Community Development Agency, That the amendments to the Lincoln Place Admissions and Continued Occupancy Plan are hereby approved.

______Executive Director Department Director

- 123 - 4E - Attachment A

LINCOLN PLACE Young Adult Supportive Housing Admissions & Continued Occupancy Plan

Adopted April 13, 2010 Amended April 17, 2012 Amended October 21, 2014 Amended November 10, 2015 Amended December 15, 2020

- 124 -

TABLE OF CONTENTS Section Page Applicant Selection and Referral Process 3 I. A. Applicant Inquiry/Referral 3 B. Applicant Selection 4 II. Determination of Eligibility for Assisted Tenancy 5 A. Determination of Eligibility 5 1. Income 5 2. Homelessness 6 3. Age 6 4. Citizenship 6 5. Criminal History 7 6. Suitability for Tenancy and Continued Occupancy 8 B. Grounds for Denial of Assistance 9 Verification of Income and Computation of Tenant Payment III. 9 A. Verification of Income and Assets 9 B. Determination of Monthly Rent Subsidy 9 C. Rent Collection Policy 10 D. Security Deposit IV. Admission to the Program 11 A. Resident Briefing 11 B. Unit Inspections 11 C. Admission to the Program 11 D. Contract Execution 11 E. Housing Assistance Payment 11 V. Reexamination of Income 13 VI. Restrictions on Use and Continued Occupancy 13 A. Termination of Rent Subsidies 13 B. Prohibition of Duplicate Subsidies 13 C. Prohibition of Portability 14 Grievance Procedures 15 VII. A. Informal Review for Applicants 15 B. Informal Hearing for Residents 15 Appendix A – Occupancy Restrictions 17

- 125 - SECTION III VERIFICATION OF INCOME AND DETERMINATION OF TENANT PAYMENT / RENT COLLECTION POLICY / SECURITY DEPOSIT

D. SECURITY DEPOSIT

Each tenant is required to pay a security deposit in an amount determined by the CDA. The security deposit will be held until the resident’s lease end date and will be returned according to Minnesota Landlord and Tenant Statute Chapter 504B.178:

The security deposit may not be used to pay charges during occupancy.

The security deposit for residents of Lincoln Place will be $350500.00.

SECTION IV ADMISSION TO THE PROGRAM

B. LEVY SUBSIDY UNIT INSPECTIONS

Each unit to be occupied by a participant of the Lincoln Place CDA Levy Subsidy Program must be inspected to ensure that the unit is in a decent, safe, and sanitary condition. A Certificate of Occupancy will be required as verification that these standards are met at the time of initial occupancy of the building. After initial occupancy, each assisted unit will be inspected at least annually according to the Housing Quality Standards (HQS) policies.standards and procedures to be determined at a future date.

The Property Manager will be notified of any unit not in decent, safe, and sanitary condition and will be provided a timeframe for correction. Upon correction of any deficiencies, staff will conduct a follow-up inspection (if required) to verify that the necessary repairs were completed. Any unit that is not restored to decent, safe, and sanitary condition within 30 days of the inspection will not be eligible for a continued rent subsidy under this program.

SECTION V RE-EXAMINATION OF INCOME

Income, assets, and eligibility for continued assistance will be re-examined at least annually and when participant income increases or decreases by $2500 or more per month. To the maximum extent possible, income will be annualized taking into account all anticipated sources of income throughout a typical year and interim rent adjustments will be limited to circumstances in which a change in the participant’s status with respect to any income source has been documented. The monthly subsidy and tenant rent will be determined based on current rent for the unit, annualized household income/assets, and the applicable payment standard. Group Residential Housing Support units income and asset information is collected, monitored and retained by Service Provider.

- 126 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Discussion Of CDA Board Officer Appointments For 2021 – Informational

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Administration Amount included in current budget Prepared By: Sara Swenson Budget amendment requested Contact: Tony Schertler FTE included in current complement Contact Phone: 651-675-4432 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Board discussion of officer appointments for 2021.

SUMMARY Annual CDA Board officer appointments will be made at the January 19, 2021 Annual Board meeting. This discussion is to plan ahead for that meeting.

2020 Officers are: Chair – Commissioner Gerlach Vice Chair – Commissioner Atkins Secretary – Commissioner Holberg

RECOMMENDATION N/A – Informational Only

EXPLANATION OF FISCAL/FTE IMPACT N/A

______Executive Director Department Director

- 127 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Recognizing Commissioner Thomas A. Egan For Outstanding Service And Leadership To The Dakota County Community Development Agency

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Administration Amount included in current budget Prepared By: Sara Swenson Budget amendment requested Contact: Tony Schertler FTE included in current complement Contact Phone: 651-675-4433 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Recognize Commissioner Thomas A. Egan’s service to the Dakota County Community Development Agency (CDA) Board of Commissioners.

SUMMARY Commissioner Thomas A. Egan has been a member of the CDA Board of Commissioners for 10 years, serving as Chair for the years of 2011-2014.

His work and support for the mission of the CDA during his time as a County and CDA Commissioner, and previously as Mayor of the City of Eagan, has resulted in the creation and preservation of housing opportunities for thousands of Dakota County residents.

RECOMMENDATION CDA staff wish to pay tribute to his commitment and support by presenting him with a plaque imprinted with the following resolution recognizing his outstanding leadership.

EXPLANATION OF FISCAL/FTE IMPACT None.

- 128 - Supporting Documents: Previous Board Action(s):

Resolution No. 20-XXXX

Recognizing Commissioner Thomas A. Egan For Outstanding Service And Leadership To The Dakota County Community Development Agency

WHEREAS, Thomas A. Egan has been a member of the Dakota County Community Development Agency Board of Commissioners since 2010: and

WHEREAS, Commissioner Egan served as CDA Board Chair from 2011-2014; and

WHEREAS, Commissioner Egan has been instrumental in the growth and development of affordable housing and community development programs; and

WHEREAS, during his tenure on the Dakota County and CDA Boards, over 1,200 units of affordable housing for families, seniors and young adults were developed by the Community Development Agency; and

WHEREAS, Thomas A. Egan is greatly respected by CDA commissioners and staff; and

WHEREAS, Thomas A. Egan has helped to improve the quality of life for Dakota County residents.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY, That Thomas A Egan is recognized and commended for his public service and dedication; and

BE IT FURTHER RESOLVED, that Thomas A. Egan is presented this resolution of commendation in grateful appreciation for his contributions to the citizens and communities of Dakota County.

Executive Director’s Comments: Strategic Plan Goal: Recommend Action Item Type-Consent Focused Housing Programs Do Not Recommend Action Item Type-Discussion Collaboration Reviewed-No Recommendation Item Type-Informational Development/Redevelopment Reviewed-Information Only Financial Sustainability Submitted at Commissioner Request Operational Effectiveness

______Executive Director Department Director

- 129 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Recognizing Commissioner Chris Gerlach For Outstanding Service And Leadership To The Dakota County Community Development Agency

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Administration Amount included in current budget Prepared By: Sara Swenson Budget amendment requested Contact: Tony Schertler FTE included in current complement Contact Phone: 651-675-4432 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Recognize Commissioner Chris Gerlach’s service to the Dakota County Community Development Agency (CDA) Board of Commissioners.

SUMMARY Commissioner Chris Gerlach has been a member of the CDA Board of Commissioners for six years, serving as Vice Chair in 2015 and 2016, and as Chair in 2017-2020.

His work, and support for the mission of the CDA during his time as a County and CDA Commissioner, and previously as a State Representative and Senator, has resulted in the creation and preservation of housing opportunities for thousands of Dakota County residents.

RECOMMENDATION CDA staff wish to pay tribute to his commitment and support by presenting him with a plaque imprinted with the following resolution recognizing his outstanding leadership.

EXPLANATION OF FISCAL/FTE IMPACT None.

- 130 - Supporting Documents: Previous Board Action(s):

Resolution No. 20-XXXX

Recognizing Commissioner Chris Gerlach For Outstanding Service And Leadership To The Dakota County Community Development Agency

WHEREAS, Chris Gerlach has been a member of the Dakota County Community Development Agency Board of Commissioners since 2014; and

WHEREAS, Commissioner Gerlach served as Vice Chair in 2015 and 2016; and

WHEREAS, Commissioner Gerlach served as CDA Board Chair from 2017-2020; and

WHEREAS, Chris Gerlach has been instrumental in the growth and development of affordable housing and community development programs; and

WHEREAS, during his tenure on the Dakota County and CDA Boards, over 400 units of affordable housing for families and seniors were developed by the Community Development Agency; and

WHEREAS, Chris Gerlach is greatly respected by CDA commissioners and staff; and

WHEREAS, Chris Gerlach has helped to improve the quality of life for Dakota County residents.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY, That Chris Gerlach is recognized and commended for his public service and dedication; and

BE IT FURTHER RESOLVED, that Chris Gerlach is presented this resolution of commendation in grateful appreciation for his contributions to the citizens and communities of Dakota County.

Executive Director’s Comments: Strategic Plan Goal: Recommend Action Item Type-Consent Housing and Livability Do Not Recommend Action Item Type-Discussion Community Vitality Reviewed-No Recommendation Item Type-Informational Community Connections Reviewed-Information Only Organizational Culture Submitted at Commissioner Request Financial Management

______Executive Director Department Director

- 131 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

CDA COVID-19 Response And Executive Director’s Update – Informational

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Administration Amount included in current budget Prepared By: Kaili Braa Budget amendment requested Contact: Tony Schertler FTE included in current complement Contact Phone: 651-675-4432 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Update on agency response to COVID-19. • Preview of items for the January 19, 2021 CDA Board meeting and other agency updates.

SUMMARY Executive Director Tony Schertler will provide an update on the CDA’s business operations response to COVID-19.

A preview of items that will be on the January 19, 2021 CDA Board meeting agenda will also be provided.

RECOMMENDATION N/A – Informational Only

EXPLANATION OF FISCAL/FTE IMPACT N/A

______Executive Director Department Director

- 132 - DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY REQUEST FOR BOARD ACTION

Closed Executive Session: Executive Director Annual Performance Evaluation

Fiscal/FTE Impact: Meeting Date: 12/15/2020 None Department: Administration Amount included in current budget Prepared By: Sara Swenson Budget amendment requested Contact: Tony Schertler FTE included in current complement Contact Phone: 651-675-4432 New FTE(s) requested Other:

PURPOSE/ACTION REQUESTED • Hold a closed executive session.

SUMMARY The Dakota County Attorney has advised that prior to closing a CDA Board meeting, pursuant to the Open Meeting Law, Minn. Stat. Ch. 13D, the Board must resolve by majority vote to close the meeting.

RECOMMENDATION The Executive Director has recommended that a closed executive session be held during the CDA Board meeting on December 15, 2020, to discuss the following:

• Conduct the annual performance evaluation of the Executive Director. The Executive Director has agreed to the closed executive session for this purpose.

EXPLANATION OF FISCAL/FTE IMPACT None.

- 133 - Supporting Documents: Previous Board Action(s):

Resolution No. 20-XXXX

Closed Executive Session: Executive Director Annual Performance Evaluation

WHEREAS, upon adoption of a resolution by majority vote, the CDA Board is authorized, pursuant to Minn. Stat. § 13D.05 3(a), to hold a closed executive session to discuss the performance of an individual who is subject to its authority; and

WHEREAS, the CDA Board of Commissioners desires to meet to discuss the performance of the Executive Director.

NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Community Development Agency Board of Commissioners hereby closes the CDA Board meeting on December 15, 2020 to discuss the performance of the Executive Director.

______Executive Director Department Director

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Finance Department Memo

To: Tony Schertler, Board of Commissioners From: Ken Bauer Re: CDA Investment Register – June 30, 2020

Introduction This memorandum is intended to accompany the CDA’s investment register as of June 30, 2020. The investment register tracks investments as defined by the CDA’s investment policy which includes both short and long‐term investment holdings. The investment register excludes investments relating to the CDA’s bond issues that are held by a third‐party trustee.

Overview of Investment Register – June 30, 2020 At June 30, 2020, the market value of all short and long‐term investments was approximately $139.4 million which is a $12.5 million increase from the $126.9 million previously reported on December 31, 2019. A breakdown of the investment register by program is as follows:

Investments by Program

Par Value Cost Market Value % of Portfolio Federal Public Housing$ 5,255,298 $ 5,255,298 $ 5,255,298 3.77% Housing Assistance 2,248,064 2,248,064 2,248,064 1.61% HOME 646,739 646,739 646,739 0.46% Total Federal 8,150,101 8,150,101 8,150,101 5.85%

State/Local HD&R 8,051,980 8,051,980 8,051,980 5.78% HOPE 4,201,209 4,201,209 4,201,209 3.01% Levy 8,265,192 8,265,192 8,265,192 5.93% TIF Districts 9,546,002 9,546,002 9,546,002 6.85% Total State/Local 30,064,383 30,064,383 30,064,383 21.57%

Business Activities Senior Housing 28,401,238 28,401,238 28,401,238 20.38% Workforce Housing LLC 1,620,994 1,620,994 1,620,994 1.16% Real Estate Operations 56,442,056 56,447,426 56,484,278 40.52% Disbursing Fund 14,664,571 14,664,571 14,664,571 10.52% Internal Service Funds 5,240 5,240 5,240 0.00% Total Business Activities 101,134,098 101,139,468 101,176,321 72.58% Total Portfolio $ 139,348,582 $ 139,353,952 $ 139,390,805 100.00%

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The $12.5 million investment increase is primarily attributable to the repayment of the Prestwick bridge loan of $5.8 million and the receipt of $5 million of January‐May 2020 tax receipts that will be used to fund budgeted expenditures in FYE 2021. As a reminder, the CDA provides construction bridge loans for Workforce Housing limited partnerships. These loans are repaid with interest with limited partner contributions.

As noted, the investment register includes both short‐ and long‐term investments. For external financial reporting, $121.8 million of money‐market funds are classified as cash equivalents. The $17.6 million reported as investments include certificates of deposit, mortgage‐backed securities and U.S. treasury and agency securities.

Breakdown by Reporting Classification

Par Value Cost Market Value % of Portfolio Money Market Funds $ 121,804,604 $ 121,804,604 $ 121,804,604 87% Investments 17,543,979 17,549,348 17,586,199 13% $ 139,348,582 $ 139,353,952 $ 139,390,805 100%

Cash Equivalents (Money Market Funds, 4M Fund) Cash equivalents consist of funds held in positions in money market funds and an intergovernmental investment pool (the 4M Fund). These investment holdings generally have average maturities of around thirty days or less and on June 30, 2020 yielded about .03% which is a significant decrease from the 1.22% that was reported as of December 31, 2019.

Investments (Federal Agencies, U.S. Treasuries, 4M Fund Term Series) Investments at June 30, 2020 consist of certificates of deposit, mortgage‐backed securities and U.S. agency securities. These investments had an average maturity of 3.7 years at June 30, 2020 and yielded 1.00% which is a decrease from the 1.55% reported as of December 31, 2019.

Performance Compared to Benchmark Per the CDA’s Investment Policy, the benchmark for investment performance are U.S. Treasury securities with similar maturities. The purpose of this benchmark is to help understand portfolio performance.

The CDA’s investment holdings at June 30, 2020 had a weighted average maturity of 3.7 years and a yield of 1.00% compared to the rolling one‐year average on three‐ and four‐year treasury securities which were 1.14 and 1.16%. respectively. The portfolio yield is slightly below the benchmark but this is primarily due to the rapid decrease in interest rates during the last twelve months.

In the last twelve months, the Federal Reserve has cut the target federal funds rate by 225 basis points (from a target of 2.25‐2.50% to 0‐.25%) due in part to the economic impact of the Coronavirus pandemic. As the CDA primarily invests in short‐end of the yield curve, this has a significant impact on our investment returns. While this is a challenging investing environment, the CDA continues to look for investment opportunities while keeping our primary focus on safety and liquidity.

 Page 2

- 136 - Dakota County Community Develoment Agency Investment Register 6/30/2020

Financial Cost Par Market Unrealized Current G/L No. Institution Inv. Type CUSIP Issuer Value Value Value Gain (Loss) Rate YTM

HD&R (H) / REO (R) R 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a$ 8,085,768.96 $ 8,085,768.96 $ 8,085,768.96 ‐ 0.0300 0.0300 H 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 570,278.53 570,278.53 570,278.53 ‐ 0.0300 0.0300 H 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 1,793,183.54 1,793,183.54 1,793,183.54 ‐ 0.1000 0.1000 H 1312‐02‐000 4M Fund LGIP‐Money Mkt n/a n/a 8,169.47 8,169.47 8,169.47 ‐ 0.0300 0.0300 H 1312.02‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 575.60 575.60 575.60 ‐ 0.1000 0.1000 R 1112‐20‐000 Piper Jaffray Fund‐Money Mkt n/a n/a 13,107,558.62 13,107,558.62 13,107,558.62 ‐ 0.0100 0.0100 H 1112‐20‐000 Piper Jaffray Fund‐Money Mkt n/a n/a (1,273,320.78) (1,273,320.78) (1,273,320.78) ‐ 0.0100 0.0100 R 1115‐10‐000 US Bank CD 14042TDG9 n/a 248,000.00 248,000.00 253,049.28 5,049.28 1.3500 1.3499 R 1115‐10‐000 US Bank CD 14042RPL9 n/a 248,000.00 248,000.00 253,049.28 5,049.28 1.3500 1.3499 R 1115‐10‐000 US Bank CD 61690UWF3 n/a 248,000.00 248,000.00 253,071.60 5,071.60 1.3500 1.3500 R 1115‐10‐000 US Bank CD 05580AWL4 n/a 248,000.00 248,000.00 253,093.92 5,093.92 1.3500 1.3500 R 1115‐10‐000 US Bank CD 7954506J9 n/a 248,000.00 248,000.00 252,878.16 4,878.16 1.3000 1.3000 R 1115‐10‐000 US Bank Agency 3134GVJW9 FHLMC 3,000,000.00 3,000,000.00 3,000,840.00 840.00 1.1000 1.1000 R 1115‐10‐000 US Bank Agency 3134GVNP9 FHLMC 3,005,370.00 3,000,000.00 3,004,530.00 (840.00) 1.1250 1.1250 R 1115‐10‐000 US Bank Agency 3135G05B5 FNMA 3,000,000.00 3,000,000.00 2,999,790.00 (210.00) 0.4500 0.4500 R 1115‐10‐000 US Bank Agency 3133ELSL9 FFCB 4,000,000.00 4,000,000.00 4,011,320.00 11,320.00 1.0500 1.0500 R 1115‐10‐000 US Bank Agency 3134GVJS8 FHLMC 3,000,000.00 3,000,000.00 3,000,600.00 600.00 1.1250 1.1250 R 1112‐20‐000 US Bank Fund‐Money Mkt n/a n/a 18,008,728.31 18,008,728.31 18,008,728.31 ‐ 0.0100 0.0100 H 1112‐20‐000 US Bank Trust Various n/a n/a 6,945,124.67 6,945,124.67 6,945,124.67 ‐ 0.0100 0.0100 H 1112‐20‐000 US Bank Trust Various n/a n/a 7,969.36 7,969.36 7,969.36 ‐ 0.0100 0.0100 64,499,406.28 64,494,036.28 64,536,258.52 36,852.24

CDBG (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a ‐ ‐ ‐ ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a ‐ ‐ ‐ ‐ 0.1000 0.1000 ‐ ‐ ‐ ‐

HOME (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 646,738.74 646,738.74 646,738.74 ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a ‐ ‐ ‐ ‐ 0.1000 0.1000 646,738.74 646,738.74 646,738.74 ‐

- 137 - Dakota County Community Develoment Agency Investment Register 6/30/2020

Financial Cost Par Market Unrealized Current G/L No. Institution Inv. Type CUSIP Issuer Value Value Value Gain (Loss) Rate YTM

HOPE (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 4,167,151.67 4,167,151.67 4,167,151.67 ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 229.10 229.10 229.10 ‐ 0.1000 0.1000 1112‐20‐000 US Bank Trust Fund‐Money Mkt n/a n/a 33,828.00 33,828.00 33,828.00 ‐ 0.0100 0.0100 4,201,208.77 4,201,208.77 4,201,208.77 ‐

Senior Housing (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 8,262,512.23 8,262,512.23 8,262,512.23 ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 2,679.38 2,679.38 2,679.38 ‐ 0.1000 0.1000 8,265,191.61 8,265,191.61 8,265,191.61 ‐

Tax Increment (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 8,080,395.75 8,080,395.75 8,080,395.75 ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 1,465,606.03 1,465,606.03 1,465,606.03 ‐ 0.1000 0.1000 9,546,001.78 9,546,001.78 9,546,001.78 ‐

Common Bond (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 22,115,561.17 22,115,561.17 22,115,561.17 ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 409,205.53 409,205.53 409,205.53 ‐ 0.1000 0.1000 1312‐21‐000 4M Fund LGIP‐Money Mkt n/a n/a 3,088,740.35 3,088,740.35 3,088,740.35 ‐ 0.0300 0.0300 1312‐21‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 270.21 270.21 270.21 ‐ 0.1000 0.1000 1312‐26‐000 4M Fund LGIP‐Money Mkt n/a n/a 109,417.74 109,417.74 109,417.74 ‐ 0.0300 0.0300 1312‐20‐000 4M Fund LGIP‐Money Mkt n/a n/a 2,576,415.63 2,576,415.63 2,576,415.63 ‐ 0.0300 0.0300 1312‐20‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 101,627.10 101,627.10 101,627.10 ‐ 0.1000 0.1000 28,401,237.73 28,401,237.73 28,401,237.73 ‐

Housing Assistance (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 1,114,963.45 1,114,963.45 1,114,963.45 ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 1,052,694.16 1,052,694.16 1,052,694.16 ‐ 0.1000 0.1000 1312‐01‐000 4M Fund LGIP‐Money Mkt n/a n/a 80,406.87 80,406.87 80,406.87 ‐ 0.0300 0.0300 2,248,064.48 2,248,064.48 2,248,064.48 ‐

Public Housing (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 3,992,298.62 3,992,298.62 3,992,298.62 ‐ 0.0300 0.0300 1112‐10‐000 4M Plus Fund LGIP‐Money Mkt n/a n/a 1,262,999.64 1,262,999.64 1,262,999.64 ‐ 0.1000 0.1000 5,255,298.26 5,255,298.26 5,255,298.26 ‐

- 138 - Dakota County Community Develoment Agency Investment Register 6/30/2020

Financial Cost Par Market Unrealized Current G/L No. Institution Inv. Type CUSIP Issuer Value Value Value Gain (Loss) Rate YTM

Workforce Housing LLC (Restricted) 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 70,740.43 70,740.43 70,740.43 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 9,482.63 9,482.63 9,482.63 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 1,183.51 1,183.51 1,183.51 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 260,499.14 260,499.14 260,499.14 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 347.73 347.73 347.73 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 291,623.60 291,623.60 291,623.60 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 517,706.18 517,706.18 517,706.18 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 266,146.44 266,146.44 266,146.44 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 136,602.92 136,602.92 136,602.92 ‐ 0.0300 0.0300 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 66,661.67 66,661.67 66,661.67 ‐ 0.0300 0.0300 1,620,994.25 1,620,994.25 1,620,994.25 ‐

Local Fund 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 5,239.82 5,239.82 5,239.82 ‐ 0.0300 0.0300

Disbursing 1112‐10‐000 4M Fund LGIP‐Money Mkt n/a n/a 14,664,570.77 14,664,570.77 14,664,570.77 ‐ 0.0300 0.0300 $ 139,353,952.49 $ 139,348,582.49 $ 139,390,804.73 $ 36,852.24

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