Herald Journal - Enterprise Dispatch - Delano Herald Journal
What is the Meeker County HRA and EDA and why all the controversy?
Nov. 15, 2010
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By Jennifer Kotila
Staff Writer

There have been a lot of rumors circulating recently about the Meeker County Housing and Redevelopment Authority (Meeker HRA) and Meeker County Economic Development (Meeker EDA).

So, what are these two entities operating in Meeker County, and what are their responsibilities? How are they operated and managed, how are they financed, and why is there so much controversy surrounding them at this time?

The Enterprise Dispatch has sought out those answers so residents of Meeker County can be more informed about what is going on with their local government.

Meeker HRA

Meeker HRA is the county’s affordable housing authority. It provides decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities, according to a letter from Chief Counsel Stephen Gronewold at the Minnesota Field Office for the US Department of Housing and Urban Development (HUD).

The letter from Gronewold answered many questions in regards to Meeker HRA, its functions, and also its history.

Meeker HRA was established June 20, 1972, following a hearing and a resolution passed by the Meeker County Board of Commissioners.

The appropriate paperwork for the Dassel Apartments to be designated as public housing was submitted to HUD in 1978.

In August 1981, Meeker HRA entered into a consolidated

annual contributions contract (CACC) with HUD to operate 25 public housing units in Meeker County.

According to the CACC, HUD provided $1 million to the Meeker HRA in 1981 for these units, with the provision that Meeker HRA operates the units for 40 years from the date of occupancy.

Since the first CACC, Meeker HRA has entered into several amendments extending the time period to provide public housing in Meeker County.

With the most recent amendment, signed by executive director Sandy Tischer in 2010, the Meeker HRA is obligated to operate 25 public housing units until 2030.

The Meeker HRA is governed under Minnesota statutes 469.001 through 469.047.

It also has to abide by any contracts, and amendments to those contracts entered into with HUD, and federal regulations.

Gronewold states in the letter that according to Meeker HRA bylaws, the HRA board, consisting of five members, is legally appointed by the Meeker County Board of Commissioners.

There have been questions circulating about whether or not appointing county commissioners to the HRA board is actually legal.

According to Gronewold, there is no law stating that county commissioners cannot sit on an HRA board.

However, there was an information brief issued by the Minnesota House of Representatives in October 2005 that states serving as both a county commissioner and an HRA board member is considered “incompatible,” according to Gronewold.

“An information brief is considered advisory; it is not binding law,” noted Gronewold.

At this time, the board members are: Wally Strand, county commissioner; Lia Nistler; Amy Wilde, county commissioner; Maureen Melgaard-Schneider, and Rebecca Warpula.

The board meets once per month at the Dassel Apartments (840 Third Street North, Dassel), usually the fourth Monday of the month, to conduct Meeker HRA business.

The day-to-day business manager of Meeker HRA is the executive director, Sandy Tischer, who has resigned effective Tuesday, Nov. 30.

There are two programs under the Meeker HRA; a public housing program and a Section 8 housing choice voucher program, according to Gronewold.

The public housing under the management of the Meeker HRA includes the Dassel Apartments (17 units), four single-family homes in Grove City, and four single-family homes in Cosmos.

HUD provides federal funds to the Meeker HRA to manage the public housing. HUD also furnishes technical and professional assistance in planning, developing, and managing public housing, according to information provided by HUD.

Along with the public housing, Meeker HRA also operates and manages the Section 8 housing choice vouchers program, which can help up to 69 families find affordable housing.

The housing vouchers are also funded by the federal government, according to Gronewold.

Section 8 housing choice vouchers is a program to help pay the rent for those who meet income and qualification guidelines established by Meeker HRA, according to information from HUD.

As long as they meet the requirements of the program, participants in the Section 8 program are able to choose their own housing.

Meeker HRA pays a subsidy directly to landlords who are willing to participate in the program. Families receiving the vouchers pay the difference between the actual rent charged by the landlord and the amount subsidized by the program, according to Gronewold.

Meeker EDA

Meeker County Economic Development (Meeker EDA) is the county’s economic development authority. Its mission is to promote the retention, expansion, and attraction of business in Meeker County.

According to the current Meeker County Economic Development Executive Director, Suzanne Hedtke, a committee was formed in 1997, to determine and make recommendations to the county to form an EDA.

In 1986, the Minnesota Legislature had passed legislation authorizing cities to establish formal EDAs to promote local economic growth.

Although EDAs were originally designed to meet the needs of cities, special legislation has been granted to several counties to establish economic development organizations, according to an EDA handbook from the Minnesota Department of Trade and Economic Development.

Special legislation was passed in 1998 to establish the Meeker EDA.

On June 3, 1998 the Board of Commissioners approved a resolution for the formation of a county EDA.

Between 1998 and 2002, the Meeker EDA received four bonds to construct 76 townhomes located in Litchfield, Cosmos, Watkins, Eden Valley, Grove City, and Dassel.

The EDA handbook from the Minnesota Department of Trade and Economic Development helped to answer questions about EDAs in Minnesota.

EDAs are governed by Minnesota statutes 469.090 through 469.108 and bylaws set forth by the county board of commissioners.

If an EDA also has the powers of the county HRA, it is also governed by Minnesota statutes 469.001 to 469.047, for any contracts with the federal government and federal regulations, according to the handbook.

According to Minnesota statute and Meeker EDA bylaws, board members for the Meeker EDA are appointed by the county board of commissioners.

At least two of the members of the Meeker EDA board must be county commissioners, and the rest of the board must be members of communities served by the EDA in Meeker County, according to the handbook.

There are nine members of the board. Those members are: Gloria Palmer, Grove City; Mark Smith, Darwin; Harold Bethel, Eden Valley; Dave Gabrielson, county commissioner; Lynn Hokanson, Watkins; Roney Kutzke, county commissioner; Chuck Lietzau, Cosmos; Myles McGrath, Dassel; and Barry Anderson, Litchfield.

The Meeker EDA board meets the third Thursday every other month at the courthouse in Litchfield to conduct business.

The day-to-day business of Meeker EDA is managed by the executive director, Suzanne Hedtke.

The formation of an EDA allows counties to utilize HRA, EDA, and county powers, so community leaders are able to create flexible business assistance and development programs, according to the EDA handbook.

The Meeker EDA manages and operates many programs in Meeker County, which include: managing 76 market-rate townhomes throughout the county, and managing and operating loan programs for new or established businesses, according to information from Meeker County Economic Development.

The market-rate townhomes managed by the Meeker EDA were built with bonds issued when the homes were built, according to Hedtke, and the debt service on the bonds is paid for with rent revenue generated by the townhomes.

According to the Meeker County Economic Development website, the loan programs offered by Meeker EDA provide “gap financing” to businesses showing a financing need due to inadequate private lender financing, inadequate equity by the owners of the business, or inability to pay market interest rates or term requirements.

This gap financing supplements the dollars provided by financial institutions and investors and strengthens financial packages, according to the website.

Financing is intended to compliment – not compete – with traditional financing sources.

Meeker EDA will not participate in a project that can be solely financed through traditional sources, according to the Meeker County Economic Development website.

The loan programs offered to businesses through Meeker EDA are funded primarily by an allocation of $95,000 from the Meeker County Board of Commissioners, according to the county’s 2009 audit report.

Rumors of a takeover

One of the rumors circulating is that the Meeker EDA wants to take over operations and management of the Meeker HRA.

County Administrator Paul Virnig was asked if it had ever been formally discussed, because the county board of commissioners would have to approve the absorption of the Meeker HRA by Meeker EDA.

According to Virnig, combining the Meeker EDA and the Meeker HRA has never been on any board meeting agenda and does not appear in any meeting minutes.

If the Meeker EDA wanted to absorb the Meeker HRA, the county board would have to pass a resolution in order to do this, according to Minnesota statute.

The county board is the only entity in the county that could place Meeker HRA operations under the management of Meeker EDA in order to streamline costs and management, according to state statute.

Although Meeker EDA could absorb the Meeker HRA, it would have to honor all contracts that the HRA currently has with US Housing and Urban Development and continue the programs and funding currently available through Meeker HRA, according to state statute.

While the Meeker EDA could absorb the Meeker HRA, the opposite is not the case.

Because a county EDA has more powers and flexibility than a county HRA, an HRA could not absorb and perform all the functions of an EDA, according to state statute.

There are also rumors that the Meeker EDA is operating illegally within Meeker County, especially in regards to the townhomes because of Minnesota statute 469.004, which states another housing authority cannot operate within the county.

According to Gronewold, there is nothing illegal about the Meeker EDA operating market-rate townhomes in the county.

Meeker EDA has no contracts with HUD to operate the homes, and the townhomes are not considered public or subsidized housing, therefore they do not fall under the jurisdiction of a housing authority.

Furthermore, statute 469.004 relates solely to HRAs, not EDAs, according to Gronewold.

Gronewold also noted that many counties have EDAs and HRAs that operate concurrently in Minnesota.

Look for more articles in coming weeks that will further explain the controversy between the Meeker HRA and the Meeker County Board of Commissioners.

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