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HomeMy WebLinkAbout06-04-12 HOUSING & REDEVELOPMENT AUTHORITY MINUTES OF THE SPECIAL MEETING OF JUNE 4, 2012 Call to order – 1.The meeting was called to order by Chair Diehm at 6:30 pm Roll Call 2. – Members present: Bruce Nawrocki, Gary Peterson, Donna Schmitt, and Tammera Diehm. Bobby Williams arrived at 6:52 pm. Staff Present: Executive Director Walt Fehst, Community Development Director-Scott Clark, Assistant Community Development Director-Sheila Cartney, and Secretary-Shelley Hanson Aeon Representatives- James Lehnhoff and Melodie Bridgeman. 3.Pledge of Allegiance - Recited BUSINESS ITEMS 4.SAC APPLICATION STATUS UPDATE FROM AEON Clark explained that on March 5, 2012 the HRA passed resolution 2012-03 which authorized staff to submit to HUD all necessary documents to start the dissolution of the Public Housing status at Parkview Villa North. As part of that discussion the Board wanted a few days to review the document prior to submittal. As part of the application an appraisal acquisition price needed to be included. A chart was included in the packet that showed: 1) The “‘as is” value-meaning using the current rent structure at both Parkview Villa North and South 2) The “as if market rate” meaning the value if the complex had no subsidy components and was using the current full market rates and 3) A value predicated on Parkview Villa North assuming Section 8 contract rents and Parkview Villa South retaining existing rents. It is absolutely critical not to confuse appraised value with net proceeds. The ultimate sales price and resulting net proceeds is still to be negotiated and combines the issues of total development cost, levels of debt versus equity, levels of debt that can be carried, final needed rehabilitation costs, etc. Clark stated those issues will be brought to the board at the July meeting along with a tentative purchase agreement. He reminded members that this application only pertains to Parkview Villa North. The application covers 100 units since the caretaker’s unit is not considered part of the PHA. Clark told members that HUD will not recognize any cash proceeds or reserves for this building back to the HRA as they have not contributed funds for the maintenance and operation of this facility as a PHA. Any remaining funds would have to go back to HUD or would have to be reinvested on Section 8 Housing in the community (which Parkview Villa North will become). Clark said the existing funds can be converted and used to pay for the re-hab or improvements that AEON will make at Parkview Villa North. This lessens the amount AEON would have to get loans for, and therefore, allows them to pay more for the south building. Nawrocki asked if the land value could be considered as an asset of the City out of the PVVN capital funds. Clark said that he would pose that question to HUD. James Lehnhoff from AEON was in attendance to answer questions on the SAC application and walked through the application in general and provided additional information on what steps are necessary to complete the overall process. Lehnhoff stated they would be submitting this application to HUD now that the board has reviewed it. Page 2 June 4, 2012 Lehnhoff stated they are working on the financing options and will have more information on that at the regular July meeting. AEON is submitting their MHFA loan application next week and will hear back in October if they will receive any funds. Staff at MHFA are excited about his project as it meets several of the issues they focus on when granting funding. Lehnhoff stated they will also pursue PARIF funds, HOME funds, tax credits, and bonding to meet their goals. He told members AEON is working to maintain the current rent structure. Eventually Parkview Villa North will be converted to a project based Section 8 program. In the interim the HRA will have to request HUD to provide tenant protection vouchers that can be converted at a later time to project based vouchers. Lehnhoff stated AEON is still on track to close at the end of 2012 or the beginning of 2013. Nawrocki asked if the vouchers would be given to the residents or to the unit. Lehnhoff stated they would be given to the unit. If residents change, and more assistance is needed, the difference would be made up by HUD. Nawrocki asked about rent for the south building. Since this is not part of the PHA, they won’t get vouchers, but Lehnhoff didn’t think there would be any substantial changes in rent. The funding sources will place restrictions on what they charge for rent. They also made it clear that they are not looking to displace any residents during this process in either building. Lehnhoff reported that AEON has retained an Architect firm (MS & R) to finalize the rehab/remodeling plans and they are also working on their support service plan to better meet residents’ needs. Clark stated that since Resolution 2012-03 was passed in March no action is necessary. 5DISCUSSION ON MODERNIZATION FUNDS . Clark stated that one of staff’s strategies in the sale of Parkview Villa is to ensure that the FY 2011 and FY 2012 (a combined $163,000 in value) HUD modernization funds are spent prior to sale. The goal would be to 1) Have the funds expended by November 30, 2012 2) Have these funds designated for improvements that need minimal bid specifications 3) Easily biddable 4) The work can be performed within a short period of time 5) The work is part of the rehabilitation plan of Aeon and 6) If the sale does not commence, the bid work will be beneficial to the long term viability of Parkview Villa North. Unfortunately, like most HRA projects the process to get to the actual work becomes difficult since spending these funds will need an amendment to the Capital Funds portion of the PHA Plan. An amendment requires a 45 day review period with a public notice. The soonest that the HRA could act on the amendment would be the last week of July (requiring a special meeting). Based on these parameters staff is recommending, in partnership with advice from Aeon, of the following work items in priority: 1) Completion of the modernization work for 6 units on the main floor ( part of the original plan) – ($41,000) 2) Change all toilets from 5.5 GPM to 1.6 GPM ( estimated $69,000) 3) GFCI outlet installation in bathrooms and kitchens ($20,000) 4) Replace Lighting in Common Areas ($20,000) 5) Installation of smoke detectors in bedrooms (up to $10,000) 6) Install 1.5 GPM low flow massage shower heads ($5,000) Page 3 June 4, 2012 If the HRA is in agreement in starting this process with these priorities the next step will be approving a capital improvements plan amendment and starting the specification and bid process. Staff recommends approval to start all necessary processes for the aforementioned work. Commission members were in agreement to proceed. Motion by Peterson, seconded by Schmitt, to Direct Staff to Initiate all Necessary Work to Amend the PHA’s Capital Funds Grant and to Start Work as Able to Complete the Subject Work by December 31, 2012. All ayes. MOTION PASSED. 6. DUCTWORK Clark explained that in October 2011 the HRA approved the reinsulating of the duct work on the roof. The idea was to tear off the current insulation and replace with new insulation as the ducts were leaking and patching was no longer working. The contract was awarded to Zephyr and they have finished the first duct. When they tore off the insulation on the remaining ducts they alerted staff that there were too many holes and rust to just rewrap the ducts with insulation and that they would not be able to guarantee their work due to the state of the ducts. Their recommendation is to tear out all of the ducts and replace with new ducts and wrapping. If we replace the ducts, the Zephyr contract would remain in place to wrap them with insulation. Zephyr provided staff with an estimate of the cost so we have an idea of what a project of this magnitude could cost. Cartney stated their rough estimate is $24,000 for the new duct and approximately $1,400 more to do temporary patching until the new duct is actually installed as the holes in the present duct allow rain to leak into the system. Staff is seeking direction to go out for formal quotes on the duct work described above. Questions from members: Nawrocki asked if Zephyr would be installing the duct also. Clark stated they are just contracted to insulate the duct. Bids will be obtained for the installation of new ductwork. Motion by Peterson, seconded by Schmitt, to direct staff to seek bids on tearing out the remaining duct work and replacing with new duct work. All ayes. MOTION PASSED. Page 4 June 4, 2012 7. APPOINTMENT OF HRA COMMISSIONER In March of 2011 the HRA Commissioners reviewed applicants for a vacated Commission position. The applicants were all from Parkview Villa North, as the PHA rules state that at least one position on the HRA must be a resident. At that time, the HRA selected Irene Sufka but due to a number of issues she was not able to assume the position and was never sworn in. The next alternative from the 2011 process is Rheta Nelson who has stated that she still desires the subject position. Staff recommends the appointment of Rheta Nelson as the new HRA Commissioner which fulfills the PHA rule of resident representation on the Board. HUD rules define that the Commission period shall be for a five year term. Diehm thinks Nelson is a well-qualified candidate and approves her appointment. Motion by Diehm, seconded by Peterson, to approve Rheta Nelson as a HRA Commissioner for a five year term, and for the City Council to make the appointment . All ayes. MOTION PASSED. 8. ADMINISTRATIVE REPORT a.2012 Operating Funds Clark told members that HUD has determined that we have too much fund balance and will not provide any Operating Subsidy for 2012. We usually get about $200,000 annually and end up with a positive cash flow of $30,000-$40,000 at year end, resulting in a projected $160,000 loss to the fund balance. These funds were being held for unforeseen expenses that may arise. Since we will not receive any operating subsidies in 2012, all expenses will now have to be taken from the fund balance. thst b.Cancel July 24 Meeting and Re-schedule for July 31. As stated earlier in the meeting we need to re-schedule the July HRA meeting in order to meet the 45 day review period requirement of the proposed amendment to the Capital Funds st portion of the PHA Plan. It was noted that there was a conflict with the July 31 date so th members decided on Monday, July 30. th Motion by Diehm, seconded by Peterson, to cancel the July 24 HRA meeting and to re- th schedule it for July 30 at Parkview Villa North. All ayes. MOTION PASSED. There was no other new business. The meeting was adjourned at 7:15 pm. Respectfully submitted, Shelley Hanson Secretary