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Home My WebLink About1993-06-30 EHA MINUTESI. II. III. rrm2/minutes/063093eha DGLBWOOD BOUSIBG AU'l'BORITY Board of Commissioners Regular Keating June 30, 1993 ml! NORDER The Regular Meeting of the Englewood Housing Authority Board of Commissioners was called to order at 6: 10 p. m. on Wednesday, June 30, 1993, at 3460 South Sherman street, Suite 103, Englewood, Colorado, 80110, by Chairman Thomas J. Burns. Members Present: Members Absent: Also Present: STUDY SESSION Thomas J. Burns, Chairman Norleen Norden, Vice Chairman R. J. Berlin, Commissioner Sheri Gulley, Commissioner Bradley Zieg, Commissioner None Kimberley K. Higgins, CPA, Partner, Bondi & Co. Kendra Padgett, CPA, Partner, Bondi & Co. Paul Malinowski, Executive Director Mary A. Ryan, Recording Secretary Representatives of Bondi & Co., Ms. Kimberley K. Higgins and Ms. Kendra Padgett, were present to distribute and review the 1992 audited financial statements. Ms.s Higgins and Padgett stated that these financial statements are the responsibility of the Housing Authority of the City of Englewood and that it was the responsibility of Bondi & Co. to express an opinion on these financial statements based on their audit. They also stated that these statements fairly represent the financial position of the housing authority. Balance sheets, statements of income and expenses, notes to the financial statements, analyses of surpluses and operating reserves were reviewed and discussed. The representatives from Bondi & Co. stated that there were no findings in the audited year. EHA BOC Regular Meeting 06/30/93 IV. Discussion ensued regarding the EHA's policy of preparing its financial statements on a prescribed basis of accounting that demonstrates compliance with accounting procedures prescribed by the Department of Housing and Urban Development. The EHA' s practice differs from generally accepted accounting principles. The State of Colorado, Off ice of the State Audi tor, sent a letter to the EHA recommending that the Authority's audit reports be prepared on a GAAP (Generally Accepted Accounting Principles) basis with supplemental HUD disclosures. Ms. Higgins recommended that EHA staff evaluate both types of accounting reports and decide for themselves which type of reporting we prefer to do. Executive Director Malinowski stated that he is not sure the EHA falls under the dictation of the Off ice of the state Audi tor. He said no communication has been received by HUD allowing us to switch to GAAP. The Commissioners thanked the Bondi & Co. representatives for being present at this meeting to discuss the audited financial statements. MJNO'l'ES COMKISSIOHBR GULLEY MOVED TO APPROVE THE MINUTES OP THE REGULAR MBBTING OP THE DGLBWOOD HOUSING AtJTJIORITY BOARD OP COMKISSIOHBRS HELD MAY 26, 1993, . AS PRESBIITED. COMKISSIOllBR BERLIN SECONDED THE MOTION. Ayes: Nays: Abstained: Absent: v. VI. Burns, Borden, Berlin, Gulley, Zieg None None None The Chairman declared the motion carried. PRE-SCHEDULED VISITORS There were no pre-scheduled visitors at this meeting. DIRECTOR'~REPORTS A. Director's Narrative Report Extensive discussion ensued regarding using $155,000 of Project BUILD funds for the City of Englewood to purchase the five lots north of the EHA office building for future use as a parking lot. Discussion ensued regarding the proposed new Fair Market Rents (FMRs). HUD has asked for comments and the new FMRs are tentatively scheduled to go into effect in October. -2- EHA BOC Regular Meeting 06/30/93 VII. B. Programs' Reports Briefly noted. DISCOSSION ITEMS, MOTIONS Mm RBSOLQ'l'IONS A. Discussion and action on decision to rent or sell 3356 South Pennsylvania Street and 2024 West Adriatic Avenue. Executive Director Malinowski told the Commissioners that the EHA had completed the house move to 3356 South Pennsylvania and the house move to 2024 West Adriatic Avenue would be completed soon. The rehab process would begin shortly and he indicated that it would be helpful in determining the extent and type of rehab if he knew whether the Board wanted to sell or rent the uni ts. He stated that conversations with persons residing in the South Pennsylvania Street area indicated that there was a preference for the houses to be owner-occupied. Briefly discussed was the EHA's earlier decision to not be in the market rental business. The houses in question are both two-bedroom, one-bath houses of approximately 1,200 square feet. Planned rehab for both houses includes the addition of a bedroom and bath. A three-bedroom, two-bath house would add to the inventory of much-needed rental housing but would not serve the lower-income households unless the rent was subsidized. If the EHA sells the properties at current market value, they would probably sell for about the price of a Project BUILD house, at an after-rehab value of $75,000 to $80,000. Given the current low interest rates, these houses would be attainable by a buyer with good credit in the 60% to 80% income category {low income) . To reach a very low-income buyer, the EHA would have to do some form of subsidy also, possibly in the form of a second mortgage. Another consideration discussed was recouping the EHA's investment. By selling the properties, the EHA should recoup all of the money invested, probably at break-even. As market rentals, the EHA would recoup some of the investment every year al though a recent analysis of our other market rentals showed more of a 2 to 3 percent return. With a subsidy, there may be no -3- EHA BOC Regular Meeting 06/30/93 return. If the houses are sold with a subsidy, the EHA would probably not recoup all of its investment at closing but might recover the rest of it at a later date (unless a declining lien is used) • COIOIISSIOIIBR GULLBY MOVBD TO SBLL BOTH PROPBRTIBS (3356 SOUTH PBIOJSYLVUIA STRBBT AIID 2024 WBST ADRIATIC AVDUB), TARGBTIBG BOUSBJIOLDS WHO BARB LBSS 'rBAB 80% 01' XBDIAB IBCOMB AIID ARB l'IRST-TIKB BOXBBUYBRS DURING TBB PBRIOD RBHAB IS IB PROCBSS. II' THE BOUSBS ARB BOT SOLD BY TBB COMPLBTIOB 01' RBHAB, TBB IBCOXB LIMITS WILL BB IBCRBASBD TO 100% 01' XBDIAB IBCOMB WBILB XAIBTAIBIBG TBB l'IRST-TIXB BOMBBUYBR LIMITATION. COIOIISSIOIIBR BBRLIB SBCOBDBD TBB MOTION. Ayes: Hays: Abstained: Absent: VIII. IX. x. Burns, Norden, Berlin, Gulley, Zieg Bone Hone Hone The Chairman declared the motion carried. PIN'ANCIAL RBPORT Briefly discussed. The Commissioners asked that the Investment Register be included in the next Board Meeting packet. CONSENT AGENDA The award of the Chuck Dillion Award by the Arapahoe County Bar Association to Thomas J. Burns was discussed. Chairman Burns stated he was awarded this for his volunteer community involvement. GENERAL DISCUSSION' A. Commissioners' Choice Commissioner Zieg stated he felt the EHA could be more aggressive in contacting developers who may be interested in donating houses to the EHA and taking these proposed housing projects to Englewood City council for consideration. Discussion ensued regarding the fact that the house moves to 3356 South Pennsylvania and 2024 West Adriatic are pilot projects to determine the cost effectiveness of this type of project now. -4- EHA BOC Regular Meeting 06/30/93 XI. Chairman Burns stated that Commissioner Berlin's term as a Commissioner of the Englewood Housing Authority Board of Commissioners was expiring July 1, 1993. Mr. Berlin explained that business interests were taking him out of the State a great deal of the time. Mr. Berlin stated that he could not give proper attention to his position as a Commissioner on the EHA Board and, therefore, he regretfully asked not to be reappointed. Chairman Burns presented a plaque to Mr. Berlin honoring him for all his time and efforts given to the EHA since August of 1987. Discussion ensued regarding interviewing candidates for the position vacated by Mr. Berlin's resignation. The Commissioners agreed on Wednesday, July 7 at 6: 30 pm to interview EHA Board candidates. B. Director's Choice Executive Director Malinowski stated he had nothing for discussion under this agenda item. ADJOURNMENT IT WAS KOVBD BY COKKISSIOBBR BBRLIB TO ADJOURB TBB RBGULAR KBBTIHG OJ' TBB BBGLB1f00D BO'OSIBG A'OTBORITY BOARD OJ' COJOIISSIOBBRS BBLD JtJHB 30, 1993, AT 8:05 P.H. -5-