Travis County Commssioners Court
November 26, 2002
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Housing Finance Corporation
Let's call to order the Travis County Housing Finance Corporation. The first item 1. Consider results of compliance audit of the lakeview apartment, and take appropriate action.
>> good afternoon, him harvey Davis, manager for the corporation. The board met on this issue on November 12th, and at that time I informed the board that -- that lakeview apartments was not in compliance with the eligible tenant leasing requirement. That requirement is at 90% of the units have to be leased to -- to tenants whose income did not exceed 80% of Austin area needian income. For example, a family -- median income, a family of four is [inaudible], a single person it would be $38,100. The owner had -- had -- had said that they would be in compliance by November the 15th. So the board asked that I come back and update you today on November 26th. And I had met several times with the -- with the apartment unit and they -- this are -- had still not regained compliance with the eligible tenant requirements, in my opinion, they won't be in compliance until probably early January of '03. I do have a few recommendations. First of all, I do -- I do recommend that the board grant them the extra time to regain compliance. And the reasons that -- that I do make that recommendation is that they have -- they have made substantial efforts since this audit began in July, as far as -- as far as getting the proper paperwork and -- and being -- doing the -- the compliance work that they need to do. They have -- they have -- they are changing management companies. I think, in my opinion, a lot of the problems with their compliance is that they had a management company that did not have the experience or background with on bond property. They are making a management change in the middle of December. And I think thisment be a positive development. In your backup is a letter in laura winfield, the executive director, explaining the reasons that they have not been able to regain compliance, you know, giving some detail and she also is -- has of course, made a commitment that they will only lease new units to low and moderate income tenants. So that -- so that they would not certainly not lease units to people that would not qualify --
>> when? January -- when in January the first -- the middle of January approximately as far as [multiple voices] ensure that they are able to rent to the low income, make sure that they come in compliance as far as the percentage of units --
>> right. The reason I picked early January is because they have a block of tenants that come up for renewal at the first of December and the first of January. And these tenants do not have the proper documentation to show that they are eligible tenants. And so -- so when those renewals are processed in the next two months, then in my opinion they would -- they would have -- would reach the goal of being at least 90% of the tenants being eligible tenants.
>> so they feel pretty comfortable with the middle of January.
>> yes, they do.
>> okay. I'm --
>> for all purposes -- I will meet -- I will go out and peat with the new property -- meet with the new property management company in late December. You know, let them have a little bit of time to get familiar. It is my opinion, however, that -- that the -- that they -- that the tenants that actually -- that do live in the units, that 90%, at least 90% of the tenants, their income is below the 80% median income. It is just that they don't have the documentation to prove that.
>> okay.
>> I mean, I have looked at the files. They have good documentation as far as people's pay stubs that show what their income is. But they have not secured the income certification form, which is notarized and the tenant confirms that they are income. In some sense this is kind of a form over substance type of issue.
>> why wouldn't we just give them until the last meeting in December? They asked for patience in the letter. They don't ask for extending to it a certain date.
>> no, they don't.
>> why don't give them until the last meeting in December, December 10th, 17th, 24th, December 31st --
>> 31st? Why don't we give them that, until then.
>> okay. That would be fine.
>> you need to start threatening a little bit, I guess, mr. Davis. I know that's in consistent with your nice personality. The documentation, whatever they need to do to come up with it, fine. Do they need more than two months and a week?
>> I --
>> I mean, if we think the -- they are actually complying but they need the documentation, I guess the law requires that we evidence compliance, not just assume that it's there based on -- based on our review.
>> that's right. That's why I had -- I had suggested the first of January because I felt that there was no excuse for them not to be in compliance in the first of January.
>> I was saying December. I really meant the end of January. I really meant a little bit more time, end of January. Whatever that date is, the last Tuesday in January. Where don't we do that.
>> okay.
>> last to us in January, judge.
>> that would be my recommendation.
>> okay. That would be fine.
>> looks like they have units being rehabilitated that they need to rent after rehabilitation is completed, right?
>> yeah.
>> yes, that's right.
>> I would give them two months, the last meeting in January the court expects to see documentation of compliance.
>> January 28th.
>> okay.
>> that would be great.
>> do we need to also make it clear, though, this is the end of the extensions that the court has been quite patient in terms of letting them work through their issues, but I have certainly have for intent to vote for another extension after this one. That's a hard candy christmas.
>> that's your left.
>> blame it on me. [ laughter ] -- that's your threat. [ laughter ]
>> we are meaner since the election. [ laughter ] I guess the only comment that I would make -- this would move to Karen over there -- [ laughter ] -- are we aware that -- is there a new management company in place now that is going to be -- to take over the management or is the owner looking for management or --
>> no. Well, what -- when I talked to the owner last week, she -- she told me that they had narrowed it down to two companies. And -- but they -- they for sure were making a management company change and that that was going to occur, I think it was December 18th.
>> > I would think that -- you know, you might ought to make sure that that new management company knows that they have a time line on them, I mean, you know, since they're new guys. It would be one thing if you were continuing to use the same.
>> that's why I said that I was going to go out there and meet with the company in late December. And discuss the whole audit issue.
>> hopefully for one of their social service programs.
>> good point, good point.
>> December 18th.
>> > I would think that -- you know, you might ought to make sure that that new management company knows that they have that new im line management company knows that they have a time line on them, I mean, you know, since they're new guys. It would be one thing if you were continuto use the same.
>> that's why I said that I was going to go out there and meet with the company in late December. And discuss the whole audit issue.
>> hopefully for one of their social service programs.
>> good point, good point.
>> what really happened -- I'm sorry, commissioner.
>> no. I said it's a good points. Go ahead.
>> what technically happens if they -- if they can't comply, I mean just -- I know everybody on the court probably knows that expect me.
>> lose federal tax exempt status.
>> it's a big deal.
>> it's a big deal [multiple voices]
>> they expect us to enforce [multiple voices]
>> come to us, we would be the ones that say they haven't complied, bingo. Can you resubmit once you lose it, can you --
>> let's get a little bit of advice on this.
>> [multiple voices]
>> each piece of property, a low income requirement and a moderate income requirements are -- that is what we are talking about here is the eligible tenant is a moderate income requirement. The low income requirement, which is 20% of the units, is the one that is connected to the tax exempt status. The modern income requirement, the eligible tenant requirement that harvey Davis has been talking about, is a state law requirement that all housing finance corporations must require at least 90% of the units in projects that are financed to be leased by persons of moderate income. And that can be set by the corporation, which we have done. This particular requirement is not tax related. It will not affect the tax exempt status. It would be a violation of the regulatory agreement and loan agreement covenants they have met with us. We would be probably faced with asking a court to order them to come into compliance, going through enforcement that way. But fortunately this particular requirement does not affect the tax exempt status which would be the worst thing that could happen on a project, they are in compliance with the 20% requirement.
>> in the event that that necessitated litigation to do whatever it would take, I mean, is that on -- on the county's nickel?
>> they would -- the borrower would be required to reimburse for all expenses.
>> and the corporation has a separate bank account.
>> okay.
>> there is money, so it would come out of the corporate.
>> okay.
>> then we would need reimbursed at some point as litigation goes.
>> assuming we prevail.
>> there would be a requirement, yes. That he is assuming we would -- that is assuming we would prevail.
>> on -- so you all suggesting -- the motion judge --
>> motion to extend to the last meeting in January, which I understand to be January 28th.
>> second.
>> okay. Any more discussion? You will communicate that immediately along with commissioner Sonleitner's, commissioner director Sonleitner's threats.
>> gentle [ laughter ] persuasive argument. All in favor? That passes by unanimous vote. 2. Accept resignation of director Margaret Moore, treasurer, and appoint new treasurer for the corporation. I move that we appoint her replacement, gerald daugherty.
>> second.
>> and accept the resignation. Any discussion? Whether you like it or not.
>> can I have a discussion. What am I getting signed up for here? [ laughter ]
>> before I --
>> if you are not around --
>> more than anything else, after we approve like invoices for payment, the president and treasurer normally dually sign.
>> okay.
>> okay.
>> the check. That happens once every 60 days, 90 days.
>> that we have checks to sign.
>> maybe three or four times a month.
>> keep you busy. Keep you signing.
>> I can sign a check. [ laughter ] any more discussion? All in favor? That passes by unanimous vote. 3. Approve new signors for the bank one accounts, and take appropriate action. Why do you need new ones?
>> because we have to fill out a new signature card, the old signature -- because we have a new signor, a new treasurer, we have to fill out a new signature card for everybody.
>> right now it's the president and the treasure hear.
>> and the -- treasurer.
>> and the vice-president.
>> three of us.
>> three of us and two are required to sign each check.
>> move that we basically designate those three persons. President, vice-president and treasurer.
>> second.
>> any more discussion? All in favor that passes by unanimous vote. Typically we look at the officers of the corporations in January. We will be looking at these again then. 4. Approve minutes for board of directors meetings of August 27, September 17, September 24, 2002 and October 1, October 8, and October 15, 2002.
>> move approval.
>> second.
>> second.
>> any more discussion? All in favor?
>> shy -- give very much that I wasn't here.
>> abstain.
>> that's right.
>> show all of the directors except commissioner daugherty who abstains.
>> move we adjourn.
>> second.
>> all in favor that passes by unanimous vote, too. He is voting to adjourn. Okay.
Last Modified: Wednesday, April 2, 2003 10:25 AM