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HomeMy WebLinkAbout1993-08-25 EHA MINUTES, I. II. III. ENGLEWOOD HOUSING AU'l'HORITY Board of commissioners Regular Meeting August 25, 1993 .QALL %Q ORDER The Regular Meeting of the Englewood Housing Authority Board of Commissioners was called to order at 6:10 p.m. on Wednesday, August 25, 1993, at 3460 South Sherman street, Suite 103, Englewood, Colorado, 80110, by Norleen Norden, Vice Chairman. Members Present: Thomas J. Burns, Chairman* Norleen Norden, Vice Chairman Sheri Gulley, Commissioner Matt Innes, Commissioner Bradley Zieg, Commissioner * Chairman Burns arrived at 6:30 p.m. Members Absent: Also Present: None Thomas A. Dinkel, President of Englewood Housing Development Corporation {EHDC) Janet M. Grimmett, Housing Finance Specialist Paul Malinowski, Executive Director Mary A. Ryan, Recording Secretary Matt Innes was introduced to the Board. Mr. Innes was appointed by Englewood City Council on July 1, 1993, to replace R. J. Berlin. STUDY SESSION Thomas A. Dinkel, President of Englewood Housing Development Corporation {EHDC) was present to discuss the refinancing of the Lincoln fourplex and the potential participation of the EHA. Mr. Dinkel told the EHA Board how the EHDC has looked at different mechanisms attempting to refinance the Lincoln fourplex. EHDC tried to refinance their existing FHA loan under the "Streamline" program, but HUD rejected this application on the basis of a regulation that says the refinancing party must also be the original borrower. The loan on the Lincoln fourplex had been assumed when the EHDC took title to the property. rnm2/Minutes/08.25.93.EHA BOC Minutes EHA BOC Regular Meeting 08/25/93 Mr. Dinkel stated that Jerry Gartner, President of the Colonial National Bank in Englewood, indicated they were interested in doing some Community Reinvestment Act work and would therefore be interested in helping to refinance the Lincoln fourplex. Colonial National Bank's proposal included the following: 1. 25-year amortization with a 10-year call; 2. Interest rate of 8.00%; 3. First deed of trust as collateral on the Lincoln fourplex and the Bannock duplex; 4. The loan would be guaranteed by the EHA after review and acceptance of the EHA's financial statements by the Bank; 5. Loan-to-value not to exceed 80%. Mr. Dinkel stated if the EHA was the guarantor on this loan and the EHDC defaulted on the loan, the EHA would have the right to pay the loan off in full or to assume the payments without any change in the interest rate or the structure of the loan. Mr. Dinkel stated that the EHDC would not expect their monthly subsidy from the EHA to continue if the EHA agreed to guarantee the loan from Colonial National on the Lincoln fourplex. Discussion ensued regarding the process whereby title to the property would automatically transfer to the EHA (without going through the foreclosure process) in the event EHDC defaulted on their loan with Colonial. Mr. Dinkel stated that EHDC could structure the guarantee agreement in any way the EHA would like, e.g. if EHDC was 30 days delinquent EHA would have the option to assume the EHDC's position as an owner and as a borrower. Commissioner Zieg stated that he was concerned about the EHA being able to easily and automatically acquire the title to the property in case there was a default by EHDC. Mr. Dinkel stated that EHDC's legal counsel could prepare documents to be signed at the time EHA signs the loan guarantee that would ensure, in case of default by EHDC, the EHA would automatically have title to the property, become the owners, and have access to the income stream in order to make the loan payments before foreclosure proceedings started. -2- EHA BOC Regular Meeting 08/25/93 KQ~!QB COMMISSIONER GULLEY MOVED THAT THE EHA ACCEPT THE EBDC'S PROPOSAL TO GUARANTEE THE EBDC'S LOAR WITH COLONIAL RATIONAL BAHK OH THE REPIHARCIHG OP THE LINCOLN POURPLEX (3167, 3169, 3171, 3173 SOUTH LINCOLN STREET). FRIENDLY AKEHDKEHT BY COMMISSIONER ZIEG: WITH A CONTRACT TO BE PREPARED BY EBDC'S LEGAL COOHSEL (WITH PROPER DISCLOSURE BY LEGAL COOHSEL THAT THEY ARE THE LEGAL COOHSEL POR BOTH EBA ARD EBDC) THAT STIPULATES THAT EBA WOULD HAVE THE OPTION TO TAKE POSSESSION OF THE LINCOLN FOURPLEX BEFORE THERE IS A DEFAULT OH THE BAHK LOAR. COMMISSIONER ZIEG SECONDED THE MOTION. Ayes: Hays: Abstained: Absent: Burns, Borden, Gulley, Innes, Zieg Hone Hone Hone The Chairman declared the motion carried. COMMISSIONER ZIEG MOVED THAT THE ENGLEWOOD HOUSING AUTHORITY SUBORDINATE ALL OF ITS EXISTING ROTES OH THE LINCOLN POURPLEX (3167, 3169, 3171, ARD 3173 SOUTH LINCOLN STREET) ARD THE BAHHOCK DUPLEX (2910 ARD 2912 SOUTH BAHHOCK STREET) TO COLONIAL RATIONAL BAHK'S REPIHARCE OF THE PIRST MORTGAGE OH THE LINCOLN FOURPLEX. VICE CBAIRKAH BORDER SECONDED THE MOTION. Ayes: Hays: Abstained: Absent: III. Burns, Borden, Gulley, Innes, Zieg Hone Hone Hone The Chairman declared the motion carried. Executive Director Malinowski asked if EHDC wanted to wait until the yearly operating budget was being prepared or until the refinanced loan is in place to eliminate the monthly subsidy from EHA to EHDC. Mr. Dinkel stated he would like to wait until the new loan is in place before eliminating the subsidy. MINUTES Regular Meeting held June 30, 1993. Note: The Regular Meeting to be held July 28, 1993, was cancelled. -3- EHA BOC Regular Meeting 08/25/93 COMMISSIONER GULLBY MOVBD TO APPROVB THB MIHUTBS OP TBB RBGULAR MBBTING OP TBB BNGLBWOOD HOUSING AUTHORITY BOARD OP COMMISSIONERS HBLD JUNB 30, 1993, AS PRBSBNTBD. VICB CHAIRMAN NORDBN SBCONDBD TBB MOTION. Ayes: Nays: Al:>stained: Al:>sent: v. VII. Burns, Norden, Gulley, Innes, Zieg Bone Bone Bone The Chairman declared the motion carried. DIRECTOR'~ REPORT A. Narrative Report Project BUILD was briefly discussed regarding the transfer of $320,000 of Project BUILD funds to an economic development fund. The $180,000 left in the Project BUILD fund would allow the program to always have two houses "in the works". Also discussed was the job duties of the Project BUILD housing specialist who has assumed the duties of the rehab program housing specialist. Executive Director Malinowski asked which EHA Board members wished to attend the National NAHRO conference coming up in late October of this year. Vice Chairman Norden stated that the number of persons attending the conference is expected to surpass earlier projections by several hundred. Briefly discussed was the update presented by Vice Chairman Norden on the Department of Institutions' application for HOPE III funds to provide homeownership opportunities. She stated that the Department of Institutions hopes to provide homeownership opportunities for 50 persons. Briefly discussed was the fair housing complaint filed by the Section 8 program participant. B. Program Reports Noted briefly. DISCUSSION ITEMS, MOTIONS AND RESOLUTIONS A. Restructure of Rehab Loan No. 207 This loan was originally a deferred loan at 0% interest rate that was restructured into an amortized loan at 0% interest with a 60-month term. -4- EHA BOC Regular Meeting 08/25/93 Due to the family's income being reduced by a recent marital separation and divorce and also by permanent reduction in work hours, the homeowner requested that the loan be restructured into monthly payments that are more affordable. The family qualifies as low-income as defined by HUD. The loan is currently four months delinquent but the homeowner has been in constant communication with the Housing Finance Specialist as the delinquency progressed. By restructuring the rehab loan, the family's housing debt ratio would drop to a more affordable ratio. COMMISSIONER GULLEY MOVED TO ACCEPT THE REQUEST TO RESTRUCTURE THE CURRENT BALANCE OP REHAB LOAN NO. 207 PROM A ZERO-PERCENT INTEREST RATE WITH A 60-MONTH TERM INTO A LOAN WITH A FIVE PERCENT INTEREST RATE AND A 120-MONTB TERM. COMMISSIONER ZIEG SECONDED THE MOTION. Ayes: Nays: Abstained: Absent: Burns, Norden, Gulley, Innes, Zieg None None None The Chairman declared the motion carried. B. Review of possible loan foreclosure. In 1987, the EHA and the City of Englewood began to assist WHERE, Inc. with the replacement of substandard mobile homes in three parks located along South Santa Fe Drive which were consolidated into a co-op run and managed by the residents. The parks were being purchased with financing provided by the Colorado Housing Finance Authority (CHFA). All funds provided for the mobile home replacement were provided by the 1987 -1991 Small Cities CDBG program administered by the Colorado Division of Housing. Approximately $580,000 was loaned to WHERE through CDBG, the vast majority of the loan ($432,876) was deferred at zero percent interest rate due upon sale, dissolution of the organization, or if the units are no longer owner-occupied. The amortized portion of the total loan, $147,600, has a zero percent interest rate and payments to be made on a quarterly basis. WHERE is currently three quarters delinquent and has requested to go to monthly payments rather than quarterly payments. WHERE has been substantially delinquent with CHFA on the first and second mortgage payments although at this time they are current on the first mortgage. Tax bills, first and second mortgage payments, and the EHA's third mortgage payments have not been made in a timely fashion. -s-. EHA BOC Regular Meeting 08/25/93 The Executive Director and Housing Finance Specialist have met with CHFA's asset management staff. CHFA indicated they are going to hire an auditor to see if WHERE has been collecting the rehab loan payments from the individual owners (which should have then been passed on through WHERE to the EHA) and if so, why have the loan payments to the EHA and CHFA not been made. Commissioner Zieg asked if it would make any sense for the EHA to foreclose on its loans and then buy CHFA out. The Executive Director explained that it would be very costly for the EHA to get into an ownership position with a straight cash buy-out of CHFA. He stated, however, that CHFA indicated they would be willing to (1) drop their second mortgage and (2) allow the EHA to assume the first mortgage. Even though it would not be cash out for the EHA, the EHA would then assume an ownership position. Commissioner Zieg stated that the findings of the auditors may indicate that with proper management, the parks would provide good, affordable, alternative housing. It was the consensus of the Board to wait for the findings of the auditor before proceeding with foreclosure proceedings. Commissioner Gulley suggested a tour by the Board before proceeding with any foreclosure. c. Authorization to submit application for funding for Family Self-Sufficiency Program. COMMISSIONER ZIEG MOVED TO AUTHORIZE SUBMISSION OP A GRANT APPLICATION TO ARAPABOB COUNTY, THE CITY OP ENGLEWOOD AND THE CITY OP SHERIDAN POR PUNDS POR USB IN THB PAMILY SELP SUPPICIENCY PROGRAM POR 1994. COMMISSIONER GULLEY SECONDED THE MOTION. Ayes: Nays: Abstained: Absent: Burns, Norden, Gulley, Innes, Zieg None None None The Chairman declared the motion carried. -6- · EHA BOC Regular Meeting 08/25/93 o. Application for Section 8 Units COMMISSIONER ZIEG MOVED TO APPROVE THE SUBMISSION OJ' AH APPLICATION TO BUD FOR 50 HEW UNITS OJ' CERTIFICATES AND/OR VOUCHERS. COMMISSIONER GULLEY SECONDED THE MOTION. Ayes: Hays: AJ:,stained: A))sent: Burns, Borden, Gulley, Innes, Zieg Hone Hone Hone The Chairman declared the motion carried. COMMISSIONER GULLEY MOVED TO APPROVE THE REVISED ENGLEWOOD HOUSING AUTHORITY SECTION 8 EXISTING CERTIFICATE PROGRAM AND HOUSING VOUCHER PROGRAM ADMINISTRATIVE PLAN. COMMISSIONER ZIEG SECONDED THE MOTION. Ayes: Hays: A))stained: AJ:,sent: Note: Burns, Borden, Gulley, Innes, Zieg Hone Hone Hone The Chairman declared the motion carried. Discussion regarding the EHA investing in the relocation of the train depot occurred at this point of the meeting. The Minutes will show this discussion and subsequent motion under Agenda Item X. "General Discussion" A. "Commissioners' Choice". E. Office Building Fund The original 1993 operating budget for the EHA Office Building was predicated on the continued leasing of the non-EHA offices upstairs. Those spaces became vacant earlier this year and have not been re-rented as yet. In order to cover the shortfall, the office building fund will require an additional $18,000 to meet anticipated expenses through the end of the year. Those expenses would be mortgage payments, utilities, etc. Donations from Simon Center reserves have made up office building fund operating shortfalls in the past. -7- .·EHA BOC Regular Meeting, 08/25/93 COMMISSIONER ZIEG MOVED TO AUTHORIZE THE TRANSFER OF $20,000 ADDITIONAL SIMON CENTER FUNDS AS A DONATION TO THE OFFICE BUILDING FUND TO COVER ANTICIPATED OPERATING EXPENSES THROUGH 1993. COMMISSIONER ZIEG SECONDED THE MOTION. Ayes: Nays: Abstained: Absent: Burns, Norden, Gulley, Innes, Zieg None None None The Chairman declared the motion carried. F. Corporate Resolution for Investments COMMISSIONER GULLEY MOVED TO ADOPT RESOLUTION NO. 2, SERIES OF 1993 1 AUTHORIZING THE OPENING OP AN INVESTMENT ACCOUNT WITH KIDDER, PEABODY, CO., INCORPORATED IN THE ENGLEWOOD HOUSING AUTHORITY'S HAMB. COMMISSIONER ZIEG SECONDED THE MOTION. Ayes: Nays: Abstained: Absent: VIII. IX. x. Burns, Norden, Gulley, Innes, Zieg None None None The Chairman declared the motion carried. G. Performance Review --Executive Director Tabled to end of meeting. FINANCIAL REPORTS Noted briefly. CONSENT AGENDA Noted briefly GENERAL DISCUSSION A. Commissioners' Choice Lengthy discussion ensued regarding the possible use of land owned by the EHA on the north side of the 600 block of West Dartmouth for either a temporary or a permanent site for the Englewood Train Depot. Commissioner Gulley stated that the depot will be demolished unless a permanent site is found within the next 30 days. The cost of moving the depot will be approximately $35,000 and the building must be placed where there are sewer and electrical hookups before the demolition date. -8- , ·EHA BOC Regular Meeting 08/25/93 Commissioner Gulley stated that in her opinion the land that the EHA owns at 607 West Dartmouth would work well as a permanent site because of its close proximity to the railroad tracks and the high visibility of this location. Once the building is set on a permanent foundation and grants to restore the building are obtained, the Englewood Chamber of Commerce can then go to the bank and say they want to buy the land the building is on. Commissioner Zieg stated that even though this use of the land is not directly related to housing, from the standpoint of civic duty and civic pride, he would have no problem with the EHA investing some of its reserves in this project. The recovered funds could then be put into sites he considers more appropriate for multi-family housing. COMMISSIONER ZIEG MOVED TO AUTHORIZE ENGLEWOOD HOUSING AUTHORITY STAPP TO INVEST UP TO $35,000 TO RELOCATE THE ENGLEWOOD TRAIN DEPOT TO 607 WEST DARTMOUTH AVENUE WITH MONIES TO COME BACK POR PUTURE HOUSING OPPORTUNITIES. COMMISSIONER GULLEY SECONDED THE MOTION. Ayes: Nays: Abstained: Absent: Burns, Norden, Gulley, Innes, Zieg None None None The Chairman declared the motion carried. B. Director's Choice The Executive Director had nothing for discussion under this agenda item. COMMISSIONER GULLEY MOVED TO ADJOURN THE REGULAR MEETING AND TO ENTER INTO EXECUTIVE SESSION AT 8:30 P.H. FOR THE PURPOSE OF EVALUATING THB EXECUTIVE DIRECTOR. COMMISSIONER INNES SECONDED THE MOTION. Ayes: Nays: Abstained: Absent: Burns, Norden, Gulley, Innes, Zieg None None None The Chairman declared the motion carried. ~Y: Rya~ Recording Secretary -9-