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EDA hears limits and opportunities for SCDP funds; refers program to City Council
Summary
Minnesota Valley Action Council explained how Eagle Lake's Small Cities Development Program (SCDP) funds can be used, including lead/radon abatement rules, a $25,000 per-project cap, and that the City—not the EDA—must apply for new grants; the EDA voted to send the topic to City Council.
Judd Schulz, Housing Director with Minnesota Valley Action Council (MVAC), told the Eagle Lake Economic Development Authority on July 23 that the City’s existing Small Cities Development Program funds must be used in the same way they originated when applied to rehabilitation projects and are subject to current federal and state rules.
Schulz said lead and radon testing are required under current program rules and, if either hazard is present, “the funds must be used to abate these issues first and any remaining funds can be used for additional rehabilitation needs.” He said the maximum amount of funding allowed on a single rehab project is $25,000 and that DEED requires a competitive bidding process for the work.
Schulz outlined how new grant awards are determined: HUB sets amounts sent to the state, DEED announces awards in the fall, and the City of Eagle Lake would need to be the applicant—not the EDA—if it pursues new SCDP funding. He also described different eligibility tracks: residential and commercial rehabilitation are both possible, but commercial projects require a designated slum-and-blight area and cannot single out individual commercial properties.
On commercial projects, Schulz said the Small Cities program typically covers 80% of costs and the business would cover 20%, and noted most commercial awards fund exterior work such as roofing or code/accessibility fixes. He cautioned that rental projects are “not recommended, and landlords would need to pay a portion” if rentals participate.
MVAC’s role, Schulz said, includes application writing, environmental review, and coordinating lead assessment and clearance; MVAC’s basic application-writing fee is calculated at $58 per hour and is capped at $16,000 for the described scope, with more comprehensive applications costing more. He added MVAC would work with the City throughout the typical 30-month grant period.
Board member Brooke Wach moved, seconded by Anthony White, to send the SCDP program to the City Council for discussion; the motion carried unanimously.
Next steps noted in the meeting: the City Council would be the formal applicant if the City pursues a new SCDP grant, staff would need to follow DEED/HUD requirements during application and project implementation, and the board directed that the City be made aware of MVAC’s offer to assist with pre-application and full application services.
