[Music] afternoon everyone I'm going to go ahead and call our capital investment committee meeting to order Senator papz uh is running late from one of her uh meetings and so I will be as a vice chair convening the meeting until she gets here uh so first off we have a uh report by the department of administrator uh the assistant commissioner um Mr wasoski I hope say that correctly yes Madam chair members for the record Wayne wasowski assistant commissioner Department of administration uh thank y
ou for the opportunity to present uh our 2023 asset preservation and CAA reports uh with me today is Greg uig he's the director of real estate Construction Services with admin and Greg's going to walk through the presentation thank you Wayne Uh chair uh members uh again for the record Greg ewig the director of real estate and Construction Services for the state of Minnesota tomor Administration so first some some context to uh ground us in our our topic today uh you know to help illustrate the c
ritical needs uh to fund a agency asset preservation requests uh consider the following the state has almost 5,000 buildings about 34 million square ft uh the buildings have a replacement value of around $ 11 billion and their average age is around 42 years old based on our forecast we have about $2.2 billion of deferred maintenance on our portfolio so the governor has recommended that a significant portion of the bonding Bill uh be allocated to fund asset preservation projects asset preservatio
n has become an increasingly important challenge for state agent agency operations uh asset preservation provides improved safety and better government while protecting State investments in the following ways first uh the funding funding asset preservation and maintaining property Ste maintaining property stewardship ensures that staff the public and guests are kept safe and that functional needs are optimally met second timely plan preventative maintenance reduces total cost of ownership freein
g up resources for other core program functions and the cost to maintain uh a building is cheaper than the cost to repair it as represented on the the chart here shown uh above the green line on the graph highlights the cost per square foot to repair state-owned buildings depending on building condition and the blue bar uh is reflective of the percent of state-owned buildings within each building uh status category addressing some of the backlog and remaining current on repairs is efficient budg
eting because it costs more to fix breaks and respond to emergencies than to fund planned upkeep and lastly funding asset preservation uh saves energy and reduces greenhouse gases modern properly operating buildings use less energy and water making agency building buildings more operationally efficient while reducing energy costs eligible asset preservation projects are statutorily defined uh but the list in this slide is representative of just some of the the types of projects our state agencie
s have completed with asset preservation funding there are the core Building Systems that you think about heating ventilation windows and roofs but also include hazardous materials abatement uh such as aesus or lead paint on this map you can see uh the high level view of of some of the asset preservation projects occurring now uh and which are spread throughout the state uh in 20 23 20 counties uh had asset preservation projects occurring the details shown on these charts uh are taken from the 2
023 asset preservation report we delivered earlier this year and as we dig into the the numbers from the report uh i' I'd be remiss if I didn't say on behalf of the agencies thank you for the support from the last legislative session the charts show the money received received for asset preservation uh purposes uh agencies are using the last remaining 2020 funds and will close out the Appropriations by the end of this calendar year uh to reorient members the department of administration uh recei
ves the funding and coordinates construction management services for the agencies uh and at the top level uh the legislature appropriated asset preservation funding of $4.3 million in 2020 and almost $70 million in 2023 uh Additionally the department of administration received funding of 9 M 391,000 from the general fund in the state government finance bill for asset preservation of the capital complex buildings and infrastructure not shown on the charts here uh the two charts uh on the slide he
re are the amounts spent on asset preservation projects during in calendar year 2023 uh agency spent about $1.4 million out of 2020 asset preservation funds and about $18 million in 2023 Appropriations the agency are expected to have encumbered or expended all 2020 asset preservation funds by the end of this year we'll spend a few moments just doing a highlight uh highlighting some of the asset preservation fundings by the agencies uh to start with the Department of Corrections uh spent nearly $
22 million at 11 locations throughout the state including Plumbing HVAC and improved security measures such as uh security fencing and other related systems uh roof and water updates were also prioritized this year the Department of Human Services uh spent approximately $3.7 million at five locations throughout the state and that included uh replacement of water main sewers in addition to roofs wind windows and Tuck pointing State Academy spent roughly $550,000 at their campus to repair concrete
and their security Corridor and Veterans Affairs spent approximately 14.8 million uh at seven locations with work on HVAC upgrades exterior repairs and replacing a sanitary sewer line on the campus uh looking ahead here is a a overall summary of the 2024 agency asset preservation requests shifting gears uh will update the committee on the capital asset preservation and replacement account report or more commonly known as cpra uh to start with uh CA is a is are funds that are appropriated to the
Department of administration and used by agencies primarily for unanticipated emergencies or hazardous materials abatement they may also be used to address life safety issues uh although overlap exists in what can be funded through kaer funds uh the kaer program is uh distinguishable from asset preservation funding uh by the fact that it's mostly focused on emergency type of needs since 2002 the state has appropriated roughly 54 million almost $55 million for uh the Capper Appropriations and wo
rk uh last year uh was a little bit more clustered around the Twin Cities uh and this is more it did impact eight different agencies uh including areas primarily around the Twin Cities 7 County Metro Area St Cloud farbo and St Peter uh the balances shown here in these two charts uh are on the left is a representation of uh the current cap balances and on the right is the the overall expenditures by year uh focusing on the last four years you can see that the balances remain steady or increased w
hile expenditures are finally getting back to more traditional expenditure patterns post pandemic as noted on the previous chart uh the kaer account has a $10.3 million balance uh which is available for agencies to use for emergencies agencies have spent about $2 million uh last year and uh noted here uh we are expecting to spend down the majority of the 2020 Appropriations by the end of this calendar year the chart here shows the 2023 Capper allocations by agency and projects uh think of this i
s as really an active projects list the amounts shown here are amounts budgeted for these projects just given their very nature of you know emergent needs sometimes the Scopes are not entirely clear so uh this is really shown to represent what we've allocated for these individual projects uh something to keep in mind uh about CA funding um that the state does have approximately 1,000 buildings uh representing about 6.4 million square feet that are in poor crisis condition we always Monitor and m
ake sure that uh uh there aren't any emergency situations arising but they do happen uh and that's really what uh we we allocate kapper for uh another note um no no projects were funded using the 2023 appropriation yet however we are uh setting them up uh if in anticipation of any emerging needs uh that may be occurring in closing uh again agencies thank you all for your past support of asset preservation and Capra and uh the agencies can attest that regular predictable investment in asset prese
rvation and Capra funding uh improves building performance and the higher costs otherwise needed oops otherwise needed uh to allocate pardon me apologize to address building failures investments in the asset preservation funding uh now allow agencies to reallocate funds to deliver programs to their citizens taxpayers and all those who enjoy the use of our buildings thank you and uh stand ready for any questions thank you thank you uh again assistant commissioner waslaski and Mr ewig um I do have
a question not so much about cpra because I understand that that's an emergency fund and so if you don't have an emergency you know but you that's okay you've got that fund but it it always kind of surprises me how um how long it takes to to spend the dollars for asset preservation we know that there's such a huge need and a big backlog um yet we still are um working out the 2020 appropriation my understanding and that was like three and a half years ago so can you just kind of talk us through
that is why it's just so slow because it it it makes us Wonder well should we spend more money on this when you already have all this money and you haven't been able to spend it and then I I know there's a there's always a fear that we won't pass bonding bills in the future so maybe that's some advice you could give us certainly yeah Madam chair members uh it's a very good question and and just to your last Point um having consistent level funding is easier to manage than than the spikes up and
down um but I would just say that once funding is receiv received it you obviously go through a series of steps involving uh the design phase so hiring the architectural and engineering firms to put together the designs uh then we go through the procurement process to bid that work out the what process procurement process yeah for forbidding the work out um and then obviously is the contractor actually delivering the project so this um follows a fairly normal pattern that we have um over the yea
rs um as far as it's really a bell shaped that that first year after you receive Appropriations you know you're you're roughly able to spend somewhere in that 15 20% range and then ramp it up um after that as you get into the out years uh 35% year two is probably a close average is in same how much in year two 35% 35% in in year three um is is a rough um estimate and again all these funds are all ated um as you know from the Deferred maintenance list the the the need greatly exceeds uh the the f
unding available um and agencies have prioritized how to um allocate and spend those funds so all these funds not only from the 2020 appropriation but the 2023 and any funding that's provided this year will be immediately allocated to projects it's just getting it into the queue um get the design work done and then get the construction delivered and then it's also working in Secure facilities obviously with our Correctional Facilities um our DHS facilities um there's a lot of coordination that h
appens at the facility level to make sure their programs are able to to remain operational um as these projects are are being completed is are there any capacity issues with the Department of admin and being able to move these projects along in terms of approving you know getting the firms to approve the AR tal design and the procurement process mean is there a staffing issue with you all I I I I think we're going to hear from deed next and we did give them a lot of work to do for sure Madam cha
ir members I I would say that it it follows the when we get a a large bonding bill um obviously this is now what you would hear is our our project managers have anywhere from TW 30 to 35 projects that they're individually managing um and so that's a lot of uh individual projects to to work through the pipeline and then you have the procurement folks the folks that work on the bidding process so there's and the bidding process takes time and all that takes time and takes resources so it right as
you get in year two then it levels out a little bit um but you uh I again the needs are far exceed the available resources the agencies you know they're obviously anxious to get the work completed it's just a matter of coordinating with the facil ities and then getting through our the overall process okay any questions from members of the committee right all right thank you very much thank you um we have do we have the Deputy Commissioner Mr McKinnon from the Department of Employment and economi
c [Music] development here's the reports you're talking about uh welcome to the committee and please introduce yourselves for the tape good afternoon Madam chair Uh Kevin McKinnon um Deputy Commissioner of economic development at deed and members uh happy to be here this afterno you have to speak a little bit louder because that mic is not great okay I'll let you know keep talking okay good afternoon and um I'll be uh just giving you an update on what happened last year um uh as it relates to de
ed and where we are from a progress perspective with uh the grantees that we've been uh working with it's a good photo that is a good photo um hopefully we can yeah hopefully we can get uh the PowerPoint up uh here in a in a second but um as all of you know last year uh we um have a historic slate of Grant uh programs that came to deed uh almost $2 billion uh to our agency uh and that has meant uh that we've been extremely busy uh and that we've been extremely um busy hiring staff and getting st
aff trained and certainly uh doing a lot of Outreach to the uh communities uh we have been uh making significant progress on implement ing a lot of the uh uh initiatives uh at deed and uh and as such um we are uh we are in the same process with the capital investment Bill uh so part of uh the $1.8 billion that we received last year obviously was uh a significant amount was in capital Investments uh we certainly have our three uh or three existing programs uh that we'll talk about a couple couple
of those here in the next segment um are infrastructure programs for uh communities uh we have a new Child Care Program but uh really uh where I think the meat of this uh report here today will be is on the uh 120 or so Provisions that we had um allocating some general obligation bonds and cash uh to a number of local uh projects in the in the capital investment bill so umug okay luckily we have the backup here great thank you okay so uh as it uh relates to implementation uh as I mentioned we r
eceived about 120 uh projects um through the two Capital uh investment bills all the projects are assigned to staff uh we have um held a number of Outreach sessions to all of the grantees uh in concert with MMB actually so that um everybody's getting uh the information that they need from uh certainly from the agencies uh and then establishing an an Avenue for uh addressing questions or uh issues um we are also uh in addition to that as we've hired new staff obviously there's not u a lot of Staf
f or a lot of people that want to work at deed that have a lot of experience in this so we've been uh really focusing on the training aspect of this between our division and uh the Workforce Development Division I think we've hired four new people uh to help administer this these uh programs um excuse me did you say you hired four new people or 40 four for to be supervisors not to be supervisors to actually be the grant managers okay Madam chair yes uh we also have uh obviously existing staff th
at deal with General Obligations bonds and some of these other um uh Appropriations um but nonetheless uh there's a whole team of people I think in all there's about 15 people that work on these uh they meet every two weeks to discuss issues uh and uh certainly to update all the tracking that we are doing uh to make sure that we know uh where everybody is in the process um so with that we have uh finalized uh and Andor are awaiting signatures on uh little over a dozen projects uh right now our g
rantees that we are working with tell us that um uh about two dozen more tell us that uh they will be ready uh in the next 3 months or so uh to proceed so uh that's really where we are at the moment uh on the update we've uh been working very closely as I mentioned with MMB MMB obviously plays a critical role here in um helping uh the projects understand some of the requirements and uh they have spent a lot of time on this as well and meeting with the grantees along with us so uh any questions I
'd be happy to answer um yeah we'd be interested in any um suggestions or advice that you have for us on how we could better prepare the grantees um that last year obviously was a banner year and that kind of resources is probably not going to be available again in the near future but who knows um so that's one thing and the other thing I'd be really interested in seeing which ones are approved and which ones are almost approved so I have I have a sense of how we're moving along um and then if y
ou can give me just some ideas um Deputy Commissioner of you know specific barriers that you've been running into with some of the grantees uh Madam chair and and members um some of the and we'd be happy to get you the list of who's been approved who's in the queue um that sort of thing um as far as uh some of the issues that we um are encountering uh on a lot of these projects and irrespective of whether it is a local unit of government or whether it's a nonprofit the issues are pretty much the
same and it always revolves around full funding and uh until you have full funding um and the types of funding that you have that will determine some of your other issues that you may have whether it be um a lean issue uh or whether it be um uh pre-design uh or some of the other requirements that come with capital investment uh funding uh so we um we work through a lot of those issues on a caseby casee basis these are all all uh very different projects uh and every uh grantee has different issu
es uh that we have to somehow solve uh and come to an amicable agreement that uh obviously meets the intent of the regulations that we're trying to follow uh as I mentioned MMB uh does play a big role uh in this uh and has been extremely helpful uh in the process uh as far as our grant managers and how we uh approach this as well we are trying to um connect people with different lenders and different things that we know um uh may be more favorable in certain situations just based on previous um
history uh I think um as I mentioned irrespective of whether it's a local unit of government or a nonprofit you still have that full funding issue and um and that's where uh most of these are probably being held up is documenting that full funding that's available for the project some organizations while they're waiting for the contract to be approved or they're they're um maybe even waiting to be funded uh they take out um what you might consider a bridge loan what do you consider a bridge loan
because it's my understanding that if they complete the project before their the contract is signed that they're not refundable for the dollars that they've spent maybe you could just talk through that a little bit around because a lot of groups because it is a reimbursement system they do take out Bridge loans to cover their expenses until they get the reimbursement from deed am I clear my question Madam chair I believe so um uh you are correct um deed operates on a reimbursement basis um um i
t uh as far as Bridge loans and how and to what date are costs reimbursable um that might be a question for um MMB uh off the top of my head it's typically in capital investment I believe it's the date of enactment uh that you go back to unless it's otherwise stated in law but MMB I is obviously here and they could probably correct me if I'm wrong um we'll be in conversation with them and we can take up that question then with them yep okay anybody else have any questions for deed and their proc
ess there should be more questions um is there I have a sense that people are kind of impatient with getting their projects funded but um so have you got that sense from people at all that um is there a backlog I know you said you hired people have 15 people total but do you feel like things are moving along smoothly or that they're still obviously you'd probably say that they were I just really want to get the money out the door and I'm just trying to figure out what are if there are any barrie
rs there that we could help with to make sure these projects are getting their money because it does seem like there it just takes a long time Madam chair and members that is um that is probably an accurate um uh assessment that these projects take a long time um regardless of whether it's a local unit of government or it's a nonprofit these capital investment projects typically always take a long time uh and um are there some projects that were more ready to go than others yes uh yes there are
and uh many of those are completed as of now uh there are still some that are out there but I will say is until they satisfy all the requirements in uh the agreements we unfortunately can't move forward uh and so that uh too is um is is what would be holding a lot of these things up but so is there urgency is there a need uh on behalf of uh some of the projects yes um is that something that um that we're trying to work through and work through the issues so so that they can comply absolutely yes
we want to get the money out too but we also have to make sure that it it gets out in the in the appropriate way so I'm just thinking out loud that we ask a lot of groups we tell them when we're on the bonding tour that we're the last dollar in and so they have to have identified where they're going to get their funding source and we ask them these questions to make sure I think maybe we could even do a better job of that to know that they're really ready I mean every project will tell us their
shovel ready right and um in many cases they're not quite there um so I think for all of us when we're working with our members and we're working with our own projects we just have to be really really clear that this money is just going to sit there for years if you haven't raised all your match or fulfilled all the requirements and we really don't you know there are plenty of projects out there that are ready to go so Senator jinsky thank you Mr uh Madam chair and Mr McKinnon a question on bdp
I think I've been carrying that bill for I think eight years now and and it seems uh in previous years there was a more of a demand and and we were always worried about running out of that and looking at the balances is now where that it doesn't seem like it's as much active as it used to be is there a reason it's not as active or is it has been active I'm just off on my numbers but I I know I requested I think it was a $20 million bill this year I think it was 10 million last year and I did it
last year because we thought we're running low and we're going to be out of money and now you see we have a balce so or a decent balance I guess uh so can you comment on that and I've always wanted to keep that fund full so we're not turning away projects because it's very very important for Minnesota to have that money ready so if a project comes in we have that money because a lot of times companies will look at multiple States and if that money is not there they're going to go somewhere else
cuz in today's society everybody's looking for for incentives to locate to their states so can you just talk a little bit about the balance of bdp and and has that been irregular in the last couple years or how that's been going Senator it's a great transition so Deputy Commissioner you might as well move on to that uh thanks Madam chair and uh Senator ginski oh it's not the transition all right um I think it is it's I can I can answer your question on the demand side of bdp I don't think deman
d has has dropped for bdp um we will be talking about that in a minute um uh about it but uh we too recog see you're later on the agenda so sorry y sorry I didn't mean to jump in since I didn't have the slideshow I didn't know if we were going to go to that or not so I just didn't want to miss my opportunity to ask the question about it thanks I was looking at the slideshow too cinski and and uh Miss Carlson pointed out the agenda thank you very much then if there's no further questions we'll ha
ve you back then in a few minutes um then we're we are going to MMB then next so that's helpful because then maybe we can get that question about um Bridge loans answered and and anything else all right great welcome commissioner Campbell you introduce yourself again for the tape and Miss Convoy uh good afternoon chair papis Vice chair PA lead Housley and members of the committee my name is Aaron Campbell and I am the commissioner at Minnesota management and budget I'm here today to present the
governor and Lieutenant Governor's infrastructure plan today I will provide an overview of the capital budget process discuss the growing needs for Minnesota's infrastructure provide an overview of the governor's infrastructure plan and walk through the capital budget financing of this plan first the capital budget process MMB collects information for the capital budget following a statutorily directed process which is open to State agencies and political subdivisions whose capital projects are
generally eligible for General obligation bonds requests are developed in odd number calendar years and published with the governor's recommendations in January of even numbered calendar years this process is facilitated by MMB after the capital budget system opened in May MMB hosted Q&A sessions and provided instructions and assistance to agencies and political subdivisions submitting projects initial information for projects was published in July then this Fallen winter MMB went on bonding tou
rs conducted meetings and reviewed projects on January 16th the governor's recommendations and all final requests were published on the screen are just a few of the highlights uh from a few of our site visits uh we were visiting wastewater treatment plans and hearing about the importance of our public facilities programs for local governments and seeing State asset preservation needs as I know you're aware there's a uh an increasing demand for Capital projects this cycle a total of $7.6 billion
in requests have been received from State agencies and political subdivisions for the 2024 capital budget $4.7 billion is requested from State agencies which is a 16% increase from last cycle and 2.9 billion is requested from local governments more than double the amount requested last cycle state agencies who own buildings and other infrastructure requested asset preservation and renovation funding these projects began to address the Deferred maintenance backlog in state infrastructure which fo
r buildings alone has grown 74% since 2015 the current backlog is 6.4 billion combining state agencies and higher education and you can see the breakdown in the upper leftand corner of the screen the 6.4 billion in outstanding deferred maintenance on the previous slide does not include other state-owned infrastructure such as roads and bridges water infrastructure and physical assets many of which are maintained by the DNR the doc and DHS for example on the left DNR replaced a bridge and on the
right DNR replaced an aging Culvert with asset preservation dollars when rebuilding DNR considered streamflow ecosystem design and effects of more intense rain events so that these resources are available for use for years to come it is urgent that we invest in asset preservation this session for a variety of reasons first it's cheaper to maintain infrastructure than to fix it when it fails it cost $14 per square foot to repair buildings in excellent condition versus $159 per square foot in cris
is condition 56% % of State Buildings systems are in Fair poor or crisis condition additionally state of Minnesota buildings have an average age of 42 years the largest and most expensive of all asset renewal projects tend to occur when a building is over 30 years old as a result significant funds are needed to be reinvested in these buildings to preserve what we have the majority of state-owned buildings are more than 30 years old so it's critical that we reinvest in them so they can serve Sans
for many years to come of note there are state-owned assets in all 87 counties so investing in them touches all corners of our state next I'll be walking through the governor's infrastructure plan on a high level in uh upcoming hearings and I think yet today uh other state agency leaders will PR be presenting their projects in Greater detail the headline here is the governor's infrastructure plan takes care of what the state has has already built this plan is designed to focus on the most criti
cal needs while keeping in mind the historic bonding bill from last session the largest in state's history a major focus of the governor's plan is investing in asset preservation last session the state's needs didn't receive as high a share of the bill as in the past asset preservation was 10% of the 2023 enacted pass package and is was 43% of the governor's recommendations importantly these recommendations are fiscally responsible this plan stays within the state's debt capacity guidelines of u
h $830 million in general obligation bonds I'll make a note that raing agencies view the state's adherence to those debt guidelines as a positive factor when determining the state's overall credit uh rating this plan is also within the $82 million balance in our forecast after inflation at the end of of FY 27 and spends only 28 million in general fund cash above forecast this plan is also within the $84 million balance in the trunk Highway fund this pie chart shows the main car categories of the
governor's recommendations and the next slides will provide some more detail 45% almost half is focused on asset preservation and renovating existing state spaces 22% is for water Transportation infrastructure 14% relates to Public Safety 10% is for housing and the environment and 9% is for other priorities including a variety of Grant programs I'll just note that overall 25% of the governor's recommendations are for Grants to non-state entities like local government so they would pass through
441 million of the plan is to preserve State infrastructure 103 million is for the University of Minnesota heaper 103 million is for the is for Minnesota state of which 82 million is for heaper and 21 million is for the St Paul College project and 202 million is for state agency preservation asset preservation excuse me including 76% for the Department of Corrections which has extensive deferred maintenance needs 22 million is included for other state agency renovation projects including 13 mill
ion for the Department of Human Services to replace water and sewer infrastructure at the St Peter campus uh that has exceed that particular infrastructure has exceeded its useful life and would impact clients and staff considerably if it fails 216 million of the plan is for water and transportation infrastructure $40 million is included for minda to address State Bridges deteriorating into poor condition across the state 37 million is included for the Met Council to keep the hline uh bus Rapid
Transit project advancing between Downtown Minneapolis and the east side of St Paul $19 million is included for the public facilities Authority water infrastructure loans and grants including $10 million for lead service lines and 18 million for new grants to address contaminants in drinking water for local government ments and $10 million is included for a new Pollution Control agency Grant uh to access excuse me address contaminants in drinking water for privately owned Wells $143 million of t
he plan is for Public Safety 75 million is included for Department of Public Safety Investments including $48 million for the new uh Bureau of Criminal apprehension facility in south southern Minnesota providing invest investigatory and laboratory analysis for criminal investigations in the area of the state with high need also included our $4 million for design and land acquisition for an expansion of the BCA uh regional office and lab in buiji and 22 million is for design and land acquisition
for a new state patrol headquarters building in addition $47 million is included for the Department of Corrections to expand education and programming space at the Rush City facility where they lack sufficient space for programming to transform lives for safeer Minnesota 98 million of the plan is for housing and the environment $ 50 million is included for housing infrastructure bonds bonds to develop housing across the state including permanent supportive housing preservation of federally assis
ted housing and deeply affordable new construction 7 .5 million is to is included to preserve existing public housing to keep it safe and healthy for residents $6 million is included to update the Minneapolis Veterans Home Building 16 to better serve its residents bring the facility up to code and to address systems that have periodic failures $10 million is included for the Board of Water and Soil resources to acquire permanent easements in ecologically sensitive areas improving water quality b
y reducing nitrogen phosphorus and sediment from entering streams and rivers and $7 million is included for the Department of Natural Resources to acquire high priority parcels and improve existing state lands through act actions such as replanting and seeding trees after Timber Harvest and finally 85 million of the plan is set aside for investments in other areas there's $40 million set aside for local projects 20 million is included for mot to maintain expand and construct mot owned buildings
such as adding mechanical space at its St Cloud headquarters which was built in 1969 and needs more space for snow removal and other equipment $12 million is included for the DNR to modernize existing and invest in new facilities such as expanding the Hibbing drill core library to meet their statutory requirement to store mineral exploration samples and $5 million is included for the Department of Human Services for Grants to political subdivisions nonprofits and tribal governments to construct
and renovate Early Childhood facilities overall the governor's plan is estimated to leverage $640 million in additional funds such as Federal and local funds examples include uh $39 million in PFA State match is estimated to uh to unlock 196 million in federal funds investing $40 million in mindat high priority Bridges is estimated to unlock 160 million in federal funds the 37 million for met council's bus Rapid Transit is estimated to unlock $75 million in federal funds and the 50 million in ho
using infrastructure bonds is estimated to unlock another 50 million in local Federal and private investment finally like to address the financing plan for the capital budget 830 million of this package is General obligation bonds and 15 152 million is made up of other funds such as housing infrastructure appropriation bonds trunk Highway cash and general fund cash for a total of 982 million across all funds this table shows the bial Financial impact for the Governor's recommendations compared t
o the forecast the debt service costs for bonds extend beyond the next bium but this table shows the banial impact of the governor's recommendations to the general fund and to the trunk Highway Fund in the general fund 830 million of Geo bonds is assumed to be the forecast based on the 10-year historic average and our debt guidelines there are some savings to the governor's recommendations compared to forecast because $1 million of General obligation bonds are user Finance atment Minnesota state
Additionally the housing infrastructure appropriation bonds will have a general fund impact beginning in fiscal year 27 and $28 million is included in general fund cash overall the general fund impact is 28 million this bium and there's $371,000 in savings next bium compared to forast again within the $82 million uh balance that is forecast for the end of FY 27 the trunk Highway fund impact is $74 million and 0 next by inum again within the $84 million balance in the trunk Highway fund and fina
lly uh just want to make note that materials for the 2024 Governor's recommendations are posted on mmb's website you can see that uh uh link above and that includes a summary listing of the state and local projects included in the governor's infrastructure plan thank you thank you very much commissioner um I guess I'd like to turn to Maryann comboy because of some of the conversations we had with deed to get some more insight I know we've had several meetings and I still have more questions um i
s to the role that m&b plays and what are some of the the problems or barriers that that you that you've run into and what could we do better in informing local government ments or um obviously you're talking to State agencies but um or informing nonprofits about what what they're kind of up against and getting a state Grant and specifically this thing about um Bridge loans and and when that's appropriate and when they can still get their funding um Madam chair my name is Maran Convoy I'm the ca
pital budget coordinator at Minnesota management and budget um I think it's a great question that you pose and um something that I'm excited about about is that um MMB received funding last session for a new capital budget Outreach position um that will reach out proactively especially to those um nonprofits and local governments um to make sure that those um all the requirements associated with General obligation bonds and general fund cash are are shared up front and there's a more um there's
more efforts and materials available um that will be catered towards those those sorts of groups so that's something to look forward to that I think will help the process have you hired that person we're very close Okay and then you also have the infrastructures r i colum yes and that's uh we've had him before us before um Micah intermill who is going to help all of our projects figure out how they can get Federal money so and our state agencies as well yeah um And in regards to your question ab
out the bridge loans I'm just going to have to um check with our debt management team because I want to make sure I get that right for the different funding sources that are involved in capital budgets because I'm just fearful that some projects and while they're waiting for the state to either approve their their project or waiting for them to work out the contract they go ahead with their project they uh they hire contractors they take out loans and then in some cases it's difficult for them t
o get reimbursed and I'm not clear as to why that is and what kind of guidance we should be giving them then so thank you I appreciate that um any other issues any other questions all right thank you very much commissioner and uh Miss comboy thank you thank you um now I think we're moving on to the um agency overviews and uh starting with the Department of admin and commissioner grool welcome to the committee commissioner good afternoon Madam chair and members thank you for your patience as we g
et our slide prepared and we're all looking for our copies to here's admin all right good afternoon I'm Tamar grundell I'm the commissioner of administration it's good to be with all of you this afternoon and good to see many of you again I'm happy to share the details of admin's capital budget requests and I brought with u me today some of our agency's property um and facility experts you also heard from a few of them a little earlier this afternoon and I'm here to I'm ready to answer your ques
tions our Capital bu budget request has four main parts the first is the parking equipment and Technology improvements phase one the governor recommends funds for admin to install parking access controls at facilities on the capital complex this proposal is admin strategy to adapt to a modern Workforce parking needs and keep contract parking on the complex competitive Capital complex employees and visitors are looking for flexible parking options Beyond monthly contract tracks for instance more
options to park hourly for one day a month or to purchase a contract for a few days a week currently admin is unable to provide that at most facilities we do have it at some because we don't have the equipment to determine the demand on the precise count of daily Parkers installation of these controls will provide us with that usage data so we can better manage demand at facilities this will minimize unnecessary parking space vacancies um the work will primarily be at the 14th Street ramp near t
he stassen building but we will update other facilities if F funds allow edmin appreciates the legislature support of the parking account relief debt excuse me debt relief in the past and this proposal is admin strategy to offer more comprehensive parking amenities so the parking account remains stable the second of our four-part requests is the state facility renewable energy and storage Fund in order to leverage funds from the federal inflation reduction act and improve the resilience of agenc
y operations the governor recommends funding to install renewable energy systems and energy storage upgrades at state-owned facilities this proposal will make a real impact especially for agencies with 247 resident operations like DHS Corrections and the Vets Home homes who often have the most inefficient state buildings potential renewable energy production systems and energy storage systems include solar arrays and geothermal heat pumps among others eligible projects at State facilities can qu
alify for a reimbursement from the federal government of 30 to 50% of the cost to install these systems the private sector has had access to these St tax credits for many years and only recently did the federal government make them available to nonprofits and governmental entities admin will work with agencies to identify eligible projects and administer the logistics to receive the federal funds um a specific appropriation is needed however because agencies don't have excess operating funds to
complete these upgrades our third of the four um part budget request is the capital complex security upgrades phase number three the governor recommends providing resources to implement additional security upgrades recommended by the advisory committee on Capital Area security these upgrades were identified in the 2014 physical security study and the 20122 security assessment update in addition to General obligation bonds trunk Highway funds will be utilized to make security upgrades to the tran
sportation building which was built with trunk Highway Bonds in 1958 this video shows the new turn Styles and security kiosk in the admin building which were made possible by a portion of the 10 million appropriated in 2018 while this funding has been much appreciated across the capital complex considerable vulnerabilities remain and so we are asking for resources to close those gaps and finally our fourth our the fourth part of our four-part request is the capital asset preservation and replace
ment account which you folks heard about a little earlier this afternoon from um some of my colleagues at admin the governor recommends additional investment to maintain Capra the capital asset preservation and replacement account it is Capra is the state's rainy day fund and covers emergency repairs and hazardous materials abatement for state agencies this program ensures that when state agencies experience unanticipated emergencies in their facilities they're operational again quickly and that
construction projects are not delayed if hazardous materials are discovered kaer funds were most recently utilized at the LOL Lakes Correctional Facility when an electrical main was accidentally hit by a contractor which severed the power connection by employing CA funds admin was able to quickly get power restored and minimize disruptions for the facilities in summary here's an overview of our requests these are targeted Investments to address key needs across the capital complex and throughou
t the state thank you again for the opportunity to present admin's capital budget requests and this concludes our uh presentation thank you so much commissioner I'm not seeing any questions so um thank you and nice to see you again thank you again for all of your time and great to see you again chair and and many of the rest of you take care um next we're inviting back um Deputy Commissioner McKinnon with deed to complete their presentation got his welcome back Senator jinsky has been looking fo
rward thank you madam chair and by the way I apologize I wasn't paying enough attention to the agenda to see Mr McKinnon on their second time so yeah I wasn't either thank you uh Madam chair and uh again Kevin McKinnon Deputy Commissioner of economic development at deed uh PowerPoint is working and um we'll uh present the uh Governor's recommendations for our agency uh in the capital budget um we have two items uh our business development public infrastructure grant program uh and our transporta
tion Economic Development infrastructure program uh we use a lot of acarum so bdp and uh Teddy uh is what we refer to these programs as uh totaling uh $5 million so the first uh program is our bdp program uh these are grants to local units of government um outside of the S County uh metro area we pay for 50% of eligible costs uh associated with the infrastructure needed to serve um uh industrial parks essentially uh across the state and to help our local communities lower the cost of development
to ultimately end users uh our communities uh can get no more than $2 million over a 2-year period um and uh as I mentioned the importance of um uh uh lowering the cost of development but also preparing these sites uh is important for our communi so that they can be ready for uh development you you can see the types of things that um this uh fund helps with uh whether that be um water uh or sewer uh extensions uh road development Etc uh this program has been around for um 2030 years uh and is u
h uh very well known by many of our communities so just as an example um we uh provided some infrastructure uh streets and utilities uh to the lever Industrial Park uh this supported the investment um of Lineage logistics out in L uh and you can see the size of the project is a very large project great project for uh lever significant investment for that community and certainly the jobs that go along with it uh the current balance uh is actually updated from probably the packet that you have uh
I believe um but um in I believe it was 2020 or 2021 we received um uh $8 million for the program and then at the same time every year in our general fund we also receive a general fund appropriation of about 1.8 million uh so couple that on top of the capital investment um that uh we received from uh last year's bill of $10 million uh we were at a relatively good starting Place uh and so uh the current balance is about 8 million uh that's left in that fund for the remainder uh certainly of the
year and and obviously for next this is no different than uh the previous discussion we had these funds are available uh for four years uh we do operate this program as a pipeline project uh so basically what that means is as projects emerge in our communities they apply to us uh and we work with them on the project to get it uh finally under contract and then uh the work to be done we do have a pipeline uh a few projects in the pipeline um a few years ago we increased the amount uh you could ge
t to a community up to that $2 million Mark uh there are and have been several larger projects that we have done like the one in the pipeline for Austin as an example of that $2 million mark so um the money can go pretty quickly if we get uh a number of very large uh infrastructure projects the second ask is our transportation Economic Development uh infrastructure grant program or Teddy this is a joint um effort that we have with the Department of Transportation um we are asking for the governo
r is asking for $2 million for this program uh and essentially what this program does is help uh communities with the local costs that go along with Transportation um uh improvements and so we do a lot of the same things that we would do from an infrastructure perspective uh whether it be land acquisition or reconstructing roadways to to facilitate uh off-ramps and things from from different interchanges uh all with uh based and based on uh the business activity that it will be serving uh ultima
tely there are some Transportation benefits and that comes into the review process as well but our portion of this is to help the community with the local um uh costs associated with the with the project so a great example of this is a project we did in Dayton uh they were awarded a million dollar uh it was basically improvements uh local improvements to supplement um a very busy highway 101 uh interchange at I94 uh obviously facilitated uh uh more efficient Transportation nodes for a number of
businesses that are in the area that you can see who have uh pretty substantial operations in that area but also uh ultimately for safety um as well uh uh the industrial area is obviously very close to that intersection and as you would guess they uh utilize that and a lot of their trucks do on a regular basis as far as our pipeline goes we have um slightly under $2 million left in this in this program we are about to make Awards this is a competitive program we open it uh basically once a year
uh and uh we had almost $3 million in applications uh and we'll be uh announcing those Awards here um fairly soon happy to answer any questions on either of these programs um we had a suggestion from a rural County to make support for um bdp revolving Loan Fund just wondering if you have any thoughts on that or if Senator jinsky has any thoughts on that uh Madam chair and members uh to make bdp a revolving Loan Fund um the way the way this works um is uh cities have a project there's infrastruct
ure that's needed we would come in uh with uh our portion would be a loan that would be repayable through the development I assume over uh a course the course of time um I've not heard of that um no one has approached us about that uh so if there is more information on that we'd be happy to take a look at it Senator on Senator dble sorry I I was going to change subjects I don't know if Senator jinsky jinsky thank you mam chair just going to that what I've seen in BPI there's a local match so it'
s a 50/50 so the city is matching that and the grants go in and it's it's you know again infrastructure Wastewater roads Bridges streets things like that to attract the industry there so I think the the grant way has been working very well I guess I haven't looked into a revolving Loan Fund to do that but I I just know it's a very very effective tool across Minnesota to get these uh new developments and and usually manufacturing industrial type uses which are huge job creators across state so I
think it works well as it is now but happy to look into a different way of looking at it might be a way of increasing the number of people you could assist I'm just wondering at the comment here about the tax base increase is estimated 134 million in the city of Dayton alone oh that's the teddy project well whatever anyway it's a thought all right changing the subject Senator Senator Dipple thanks I did want to bring up the Ted program or Teddy I guess we call it now um which is honestly a it's
been around for a while I think I funded it out of my bill a few times I'm not sure if it comes out of Senator Champions bill ever or your bill um but I know my bill has funded it a few times but it honestly don't understand it that well never have I mean Transportation Economic Development sounds good um but uh I've never really understood um you know what the what the uh criteria are um so that a particular Community uh competes well or not um what the demand is you said $3 million in requests
with $2 million in Grants that can go out did I hear that right commissioner mam chair that's correct so that that doesn't sound like a lot of I mean I'm I'm used to hearing about $50 million in demand for $2 million in available funds so I'm I'm wondering if if communities know about it to the extent that they that they should or could um and also I'm curious to know about what kind of funds this Grant leverages and if that's one of the analyses and criteria that we scrutinize you don't have t
o answer these questions I think what we're going to do is bring you into our committee uh and have this conversation thank you thank you did you want to comment at all Deputy Commissioner uh Madam chair and senator Dibble uh what I would say is um a lot of communities base their applications on the available funding which is obviously published um uh as far as uh criteria and those things happy to to uh talk in more detail about that and certainly about the The Leverage and how not only the tra
nsportation project is a piece of the leverage But ultimately the business um investment that we're trying to facilitate along with this so happy to answer those questions when appropriate okay thank you very much thank you uh next we have uh Chelli with the Metropolitan Council good afternoon chair p and and good afternoon Senators members of the committee uh while Hannah's setting up oh and our PowerPoint works so it's great to have the opportunity to be before you I'm Charlie zelli chair of t
he Metropol Council and um I really want to thank this committee I know a number of you joined us on some tours to Regional Parks saw some bison uh maybe I think there was a tour of our Wastewater Plant in St Paul so um I appreciate we were very fortunate that we had an outdoor tour of your wastewater treatment plant we have gone into wastewater treatment plants it was an experience not to be repeated yes uh that's part of part of the right Madam chair part of the hazard and in in interest in uh
this line of work that's right yeah um I'm actually joined today by a number of experts in the three areas that we're going to be covering uh staff includes Katie Roth who uh manages our our brt program uh EMT Mullen who manages our Parks program uh Sam pasy and Walter Atkins uh who are experts in this inii and the Wastewater uh business and of course you know Jud chatan and Hannah Palm um I'm going to take you through this presentation to talk about three areas uh as part of the governor's req
uest um and I will uh to move things along just get right to it first with the arterial busway Capital Improvement uh program um I think many of you recognize the value of these arterial bus Rapid Transit um uh lines there's three operating uh there's several that are uh under development and then uh even more kind of on the drawing boards um it's really telling that the aine now is actually exceeding ridership as where it was in 2019 pre uh pandemic in fact it when it uh started a number of yea
rs ago uh it already exceeded uh some of the lines that were there and that really becomes uh from the enhanced kind of quality of the service the express uh nature of the runs they're over as much as 25% faster um really great stations and I'm find it curious we have a picture with a snowstorm that's a little Nostalgia for you for winter but um uh but you'll know that uh the a b the A C and D lines are going well B is under construction and they have been uh really kind of interconnecting uh uh
spines to uh our larger Transit Network this uh $37 million request proposal is uh specifically for the hline which run from minneap to the Sunray uh shopping center um it will have the opportunity to leverage federal funds through the small starts program so we uh believe this would score well and is appropriate given the past uh success uh the work would be band eligible uh environmental work uh RightWay acquisition design construction uh and um as I say there are more lines coming uh to um u
h if there were ever excess funds from federal funds we would be able to apply it to uh JK and and L this is the line East West so it really covers both East and West Metro um and more importantly is this slide um really showing the potentials for additional abts um you know we would expect uh these system to be in place by 2030 which is very soon and then of course beyond that um there's even more opportunity for specific corridors and again to replace uh slower moving bus lines but heavily tra
veled to bring in this express service that also kind of connects all these Transit ways together so this vision for Metro transit to keep people living their lives within 30 minutes of wherever they want to go without long connections um is really coming to fruition so with that I'll just jump into the inflow and infiltration program as part of our Environmental Services um we know our commitment uh to water is vast within the Metro uh Cil U kind of family of of of both planning and operations
uh we uh are obviously engaged in Wastewater but we also o care a lot about water quality we measure it res research it and we work with local communities on on their plans but really look at the Wastewater um it's a pretty it's a very efficient system nine wastewater treatment plants you've maybe seen the largest one in St Paul um one of the ways we've been so efficient is that we have been smarter people 50 years ago uh or so uh really uh made the investment to separate groundwater storm water
from the Wastewater and that allows that Wastewater system to be much more efficient and to kind of Meet the demand without having spillage into any of our Rivers uh nor to be able to uh to keep our rates down we're that's one of the reasons we're probably one of the most affordable systems in the country and if you talk to some other older industrial cities or look at them uh they don't have that separation and and what's involved in that separation as you can see this is kind of a model of se
wer systems and when you look at the home the business attaching to the city system which attaches attaches to our kind of larger met Council managed Interceptor system uh the the Wastewater the storm water goes into lakes and uh and rivers uh more freely and doesn't eat up the capacity and the inflow and infiltration program is a way to protect that capacity of the Wastewater system um and uh even even more so and it's incredible investment and very important we think for many cities who have p
articipated in this this program uh when we have a little uh roots and uh uh and decay of old pipes uh the Water The Clean Water uh from rain or or Sprinkling Systems seeps into the our Wastewater system and and hurts not just the broader capacity of our wastewater treatment plants but actually the the the pipes of many of these smaller communities so it's very popular with our uh with our uh with our cities um there are very clear guidelines as to uh which cities are eligible and of course uh t
his funds are provided on a 50 matching basis so it's often a kind of an an opportunity for cities uh to do the work that they need to do but to have the state come in with this program uh gives it a real leg up um before you go on Sher Elli um what what has been that usually there's a fairly small amount that is appropriated in the bonding Bill and then it looks like you also match that that with Metro counil funds I'm questioning I'm asking that question and my second part of the question then
is you know what's the demand for for assistance I mean there's a lot of cities here we've heard from some of them that are have a really big problem with inii um probably more than they can handle on their own so and and joined by Sam pasy um I will say and then Sam will kick me if I'm wrong um that uh we do have the uh console matching as part of our Parks program but this Wastewater system is a pass through oh he's looking at me so I got it I see an additional 12 million that was from our bo
nding Bill last year last year we had significant catchup uh on on some of the the past uh uh uh deficiency but there is a need that exceeds what we're what the governor is recommending however there's a with what was appropriated last year um and then the construction business uh and the actual uh contractor's ability to kind of deliver a lot of those programs we don't think we're that far behind but Sam you answer the yeah thank you welcome Mr pasy just repeat your name Sam Pas Sam pasy um the
re is no council match for this program but it is 100% pass through answer more about the need though oh the need um local government has to maintain the pipes that then feed into the regional system and there can be a struggle to do that so we're trying to support the local capacity um to make those infrastructure Investments uh These funds don't cover all of the need uh it would be extreme um if we were to calculate even what that would be well I'm really interested in more information on the
need if you could provide that to the committee like do you have um a backlog and request what's the process um I mean we've had some cities that have come to us to give us an earmark uh because they're not able to do the local match or they're too far down the list with the Met Council so you know we're kind of we would just as soon go through the grant program and you know fund it adequately than to have everyone uh come to us for an earmark what I would propose is uh are uh the the two indivi
duals who normally would be presenting the details are both out of state right now I'd propose we provide that detail level information on local need uh to you next week sometime that would be helpful thank you Senator jinsky thank you madam chair kind of along those lines with you your priorities and what you're asking for for The Med Council it's 44.5 million and I I know the busway rapid transit is important thing but to my understanding I mean you get hundreds of millions of dollars collect
ed through the county tax uh why aren't you using those funds to leverage the federal funds and that and asking more for the for the I I I know I is important but I mean correct me if I'm wrong but the Met Council receives hundreds and hundreds of millions of dollars from the county tax for transportation that could be used for the bus Rapid Transit correct yeah the sen uh chairi M uh Madam chair and uh senator jinsky they uh knew knew as in last year um uh sales tax in the metro area associated
with u with Transit is eligible for uh for capital capital repairs and for um and mostly for operations so um that a longer term um is certainly eligible but given the history of the abts and the ability to uh to use the operating funds that we have to to operate this much more robust system uh we know that we will over time have extra funds and there is also additional service that we'd like to uh provide uh and some of those were're part of the part of the legislation like a microtransit like
some free Fair zones um certainly taking over quite a bit of the cost of all transit ways now um so uh I think that um there's been a an appropriate balance uh with some uh State funds toward this uh toward this program that's been uh a matched not just by U by ourselves but by uh the federal program so I think about youi I know and I think the and I got to calculate three the 34 Cent sales tax or 3/4 Cent sales tax is going to bring them about 400 400 million dollar per year and that's in addi
tion to the uh Transit taxes collected so again seeing those funds to go to bus Rapid Transit and money money requesting here go more towards thei and things like that I think makes more sense for mus as far as what we're funding them through the through the bonding bill so just my last comments thank you any other questions um we're kind of all about Clean Water and Sewer here we see the great need around the state thank you very much uh oh I'm sorry we still have Parks well want to uh touch on
Parks this is just a map of some of those uh cities that you're many of them hearing from I want to just touch on Parks uh and that is a that is a matched program so I understand that's confusing we actually give $2 for every $3 as part of this program uh some from of the Met Council Levy uh the governor is uh proposing $2.5 million uh this again is 100% pass through to the uh 10 implementing agencies or Regional Parks uh systems um I don't need to tell all of you how important the Parks have b
een over the past number of years really tremendous uh metropolitan area asset 55,000 Acres um and 55 different park parks in those 10 implementing agencies also includes over nearly 500 miles of regional Trails which all of this we expect particularly the trails to be increasing in the in the years ahead um so here's a list of the cities and and I'm sorry the implementing agencies that would um uh uh that actually have specific projects associated with these funds so the one thing that benefits
this program is not only the additional funds that MC conso is able to match but uh a real agreement among those implementing agencies on how we uh uh divide the funds for their specific projects based upon uh a formula that they've all agreed on both on population and on uh and some of the usage of their of their Parks um so here's as you can see where the 11 projects are across the region and that is my uh our report and I'm happy to answer any other questions or have people here who who who
do um sorry I'm just a little bit behind you the the um breakdown by agency um did you say that was on slide 19 um did you say this is what they were appropriated from last year's Bill no this is uh what the $2.5 million plus the roughly 1 7 million together is this $4.1 million and then how that those funds would be allocated among the agencies so I'd be interested though and also learning about um how you spent last year's funds sure that would be helpful yeah Madam chair I we can U get that t
o you next week great there were just two handouts I was confused by the two all right yeah okay any questions about the parks anyone all right thank you very much Cher zelli thank you and then finally we have um chair ho Minnesota Housing Finance Agency commissioner ma'am you're the chair I'm the chair and chair zelli is the chair but you're the commissioner right sometimes I didn't call you Senator ho that would have really been a it's happened a degradation demotion aspiration chair papis and
uh members of the committee my name is Jennifer ho and I'm the commissioner at Minnesota housing I'm here with Dan ksbg who's my legislative director thank you for the opportunity to talk about um the ways in which our work intersects with your committee and the governor's budget recommendations just want to start for a moment to just ground this in need we have a shortage of about 50,000 housing units still in the state about 10,000 of the 30,000 HUD Section 8 units have contracts that will ex
pire in the next four years putting them and the federal dollars that make them affordable at risk of being lost permanently over 8,000 people experiencing experience homelessness each night nearly 2,000 of whom are sleeping outside and people facing chronic homelessness has increased 123% since 2017 housing inst stability is impacting more motans nearly 215,000 renter households are making less than $50,000 a year and spending more than 30% of their income on rent and black indigenous and house
holds or color are more likely to be housing cost burdened be evicted from their housing experience homelessness and are less likely to become homeowners that is the context in which I bring the governor's proposal the governor has proposed $50 million this year in housing infrastructure bonds and this would create or rehab an estimated 500 homes as well as 7 A5 million for public housing Rehabilitation that would uh rehabilitate or preserve an estimated 375 homes these are modest compared to la
st year's Investments but it's crucial that we keep moving forward with investments in housing capital we know that the development Community um to whom I still had to say no to many even with the amounts that were available last year we know that the development Community needs to see the signal that the state is going to keep chipping away at this at this housing shortage until we get it right in terms of cost to get to the estimate of homes uh we're estimating about 100,000 per unit for somet
hing done with housing infrastructure and about 20,000 uh per unit for something that's done with public housing it's actually up from about 10,000 per unit with public housing but it's we got more resources we can actually do larger preservation and Rehab projects so let me dive in just a little into housing infrastructure bonds so just a refresher why do we have housing infrastructure bonds it's because 95% of the housing in Minnesota is privately owned and Geo bonds are limited to publicly ow
ned units so the pie slice over there is the 5% of publicly owned housing that would be eligible for a Geo Bond like public housing preservation but the vast majority in the housing of the housing in the state is not go eligible and that's why these were created uh going back actually precursors to the 2012 session and since 2012 housing infrastructure resources have been the largest state source of capital for Housing Development to deal with the the shortage I I also think it's really importan
t to understand that housing infr structure bonds are an incredible leverage tool um they leverage uh uh one to one including federal funds from HUD tax credits uh and other Federal sources they are also something that um that my colleagues across the country are envious of uh we were the creators of housing infrastructure bonds and it's one of the tools that we have that other state Housing Finance agencies don't housing infrastructure supports a continu of uses uh pictured here uh the presiden
t reservation of federally assisted rental housing again important to keep those units as federally assisted keep the federal assistance there instead of having those buildings sold off for other purposes uh they help us build and rehabilitate permanent Supportive Housing which is a proven method of helping people with even the longest histories of homelessness become stably housed and work on recovery in other parts of their lives it helps us create affordable housing for seniors um and allows
us to do senior housing for seniors on a fixed income seniors who make the least it now finances manufactured home Community acquisition and infrastructure so we've been able to support a Cooperative ownership of manufactured home communities and we've done really critical infrastructure work often times where you have poor drinking water undrinkable drinking water sewage seepage um bad roads such that school buses and garbage trucks can't get in and our safety hazard for residents as well as st
orm shelters and other electrical work it helps us develop single family homes including in Community Land trusts and it does uh as of last year uh just more new construction of deeply affordable rental housing so here's uh some examples of uh housing infrastructure bonds at work uh in this last selection period we uh selected a permanent Supportive Housing project in duth called Welch Place you can see um uh what the project itself uh will do but basically more Supportive Housing to help people
off the streets this is an example of a rental housing preservation project in Hutchinson I don't think we got the best side of this building in the shot but this was the shot that was available to us but again a really important um preservation deal it's uh the ability for Southwest Minnesota Housing Partnership to acquire and rehab and keep therefore this uh program and the USDA rental assistance that it has in service to the people of that Community this is an example of a manufactured home
Community uh infrastructure project that we recently selected the Normandale manufactured home Community down in Redwood Falls and uh this is uh you know a modest investment that's going to help um replacing roads and sidewalks deal with the failing storm sewer system um and it also is leveraging local money from the city of Redwood Falls and then we've done some single family uh new construction uh this is one from our most recent announcements uh the home ownership program for equity in Golden
Valley 3.3 million of housing infrastructure for 20 new homes and this is where the city is actually making public land available so again highly leveraged for owner occupied single family duplex and row homes so uh smaller homes more more affordable uh for people in the Golden Valley Community and then they're all going to be placed in a community land trust to ensure long-term affordability so uh in summary uh since 2012 612 million has been committed leveraging over 1.3 billion in total deve
lopment cost nearly 6,000 units have been created to preserved including units that are in the pipeline now about 55% of the households that were renting uh were people of color and about 56% of households included a person with a disability we do have these newer expanded eligible uses the single family development expanded in 2020 and nearly 80 million has been committed that will impact uh over 1300 homes and then the manufactured home Community acquisition and infrastructure was added in 201
8 and we've committed over 20 million which impacts 1,000 700 Lots let me pivot from housing infrastructure bonds to public housing Rehabilitation which is General obligation bonding we fund Capital Improvements in publicly owned housing one of the reasons that we do that is that even though the federal government built those units the federal government has not kept up with the Deferred maintenance on those units and so even though they are a critical part of the housing uh for low-income senio
rs people with disabilities and families and communities across the state um they just it's an aging stock and so the work that we've done really deals with really basic health and safety uh fire suppression accessibility um Plumbing elevators HVAC um you know windows and roofs uh from 2012 to 2020 uh we we've done 63.5 mil 115 projects 8,500 units with this public housing preservation here's some examples uh Lake View highrise in Wilmer if you've driven through Wilmer you will have noticed this
building it's probably the tallest Residential Building in Wilmer 127 one better units that was built in 1971 I um it has a preference to elderly and disabled households and it's owned and managed by the candy Ohio County HRA they we got funding in 14 17 and 18 to do the work in phases um the most recent scope was all the building exterior um really around air quality uh and Energy Efficiency for the building uh this is uh Cedar High apartments in Minneapolis 25 story building 191 units owned b
y the Minneapolis public housing authority I think sadly we all know this property because this is where the Fatal fire occurred and um you know this is where we've been able to use a pop investment in order to install a fire sprinkler system throughout the building including the common spaces and tenant units the fire pump panel replacement and fire alarm system upgrades I got a slide that wasn't uh in your packet uh but I wanted to just highlight that of the public housing uh bonding and cash
that was made available uh we have decided to put it out in phases not all at once because we think that uh the smaller phas uh uh may not be ready for all at once we have some considerations around the cash that we need to think through in terms of how the cash solicitation would happen differently than the geobond solicitation and so uh we're putting out 41 million it's actually out now uh with applications due on March 6 but I'll just note that even though 41 is only a portion of what was uh
designated by the legislature last session this is much larger than any round of pop that we've been able to do historically I think previously the largest year we had was 16 million so um it's uh the the fact that we have that process underway uh you know I feel good about and I think it's also going to help us make sure that the organizations I mean some of these uh greater Minnesota public housing authorities like this is the building they own and um so they don't have big staffs that are man
aging large portfolios so they've done an awful lot to try to make sure that the program is accessible um in communities all across the state uh which brings me to slide a map uh I love Maps um this is a a a map of all the places that that pop has been invested uh between 2012 and 2020 and you'll see that uh the distribution of dots 64% % of the funds have gone to Greater Minnesota uh about half of the units have been in Greater Minnesota versus the Metro because the buildings are larger uh in t
he Metro uh and it's just done a lot around health and safety as well as Energy Efficiency and climate resilience so I um I really hope that there's an opportunity to have housing included in a bonding bill this year I we did go big we went really big last year but it wasn't enough to satisfy what we need to do to meet the housing needs of Minnesota and so continuing to make these Investments is just really critical and I would be happy to take any questions that you have thank you commissioner
I believe last year that the housing infrastructure bonds went through the housing committee so I know the governor has put it into his capital investment proposal but it's not clear at this point whether it's going to be in our bill or if it'll be in a you know a separate bill through the housing committee nor is it clear to me Madam chair yeah any questions from anyone thank you thank you very much thank you and um Miss uh Carlson you want to tell us about next week have a good weekend commiss
ioner thank you for that um so next week we will not be meeting on Tuesday but we will be meeting on Thursday the 29th um we anticipate hearing ing from the DNR mpca Bowser PFA DHS menot and the amateur sports commission um and then we will continue agency overviews included in the governor's recommendations into the following week all right thank you any questions from members of the committee then with no nothing more to come before us oh Senator H Madam chair um do you want to tell the commit
tee what you're doing tomorrow morning for breakfast is it tomorrow morning oh my goodness well you're all invited to join me for breakfast where I'm the alumni of the year for Metro State oh I did send out invitations to a few people Karen Hy was one of them yes I just wanted to congratulate you and have a good breakfast thank you all right thank you so much it's not tomorrow it's not tomorrow oh it's not tomorrow Ken it's next week oh that's why Micah breakfast for me is tomorrow yeah that's w
hy I was confused by what you said what it's tomorrow oh next next week March March 1st or second or something thank you March 1st thanks I got to change that good thing I didn't show up good thing all right the committee is the Jour [Music] um [Music]
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