Travis County Commssioners Court
September 16, 2003
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Corporations
Good afternoon. Let's call to order the Travis County housing finance corporation. First item is to approve budgets for f.y. 2004 and take appropriate action.
>> good afternoon. Harvey Davis, manager for the corporation. And let me point out a couple of items on the budget for the housing finance corporation that I'm asking the board to approve. One thing is we have -- I have recommended that we put -- establish a reserve of $60,000 for possible uncollected annual fees. I've had some difficulty this past year with collecting all the annual fees. Then the major commitment for the corporation that are in the budget is the second payment to any baby can and the plat fee reimbursement plan. Other than that, the assumptions like in prior years is that the -- there would be no bonds issued. We take the conservative approach, there would be no bonds issued. And of course if the corporation does issue bonds, then there would be additional fees, and some additional expenses.
>> let's go ahead and call to order the other corporations. Wee adjourn them and take up item 2 for housing finance. Let's also call to order the Travis County health facilities development corporation, the capital industrial development corporation and the capital health facilities corporation. We have budgets for all of them.
>> yes. And the important thing I would like to point out on the health facilities development corporation, that in its budget there is the $300,000 transfer in f.y. '04 to Travis County. So by approving their budget, then you are also approving the transfer to Travis County that was recommended by the Commissioners court.
>> a question you had raised related to difficulty of getting fees out of two non-profit housing bond groups. Are they late? How late are they? And how are we making it clear to them that if there's a fee owed, that the fee is paid? Because we certainly were timely in terms of the approval of their document. It seems they ought to be timely with the remuneration of what they were supposed to do with their property.
>> well, the two apartment complexes are lakeview and the parks at wells branch. The lakeview situation, I did bring to the board's attention a couple weeks ago and there was a discussion on that. On the parks at wells branch, that payment was due in June of -- this past June. I had contacted the owners and there was not -- there was not sufficient revenue that was being paid to the trustee from the apartment operating business to pay the annual fee. In July the owner said, well, they were going to go ahead and pay it from -- this is a minnesota company, and they were going to go ahead and pay the annual fee from their -- from the corporate offices. But since that time, they were denied their tax -- property tax exemption, and so that has sort of come into play, the fact that the appraisal district has denied their property tax exemption. When I last talked to them, they had not made the commitment that they had made earlier of paying the annual fee, so that -- that could be an item that I could bring back to the board, and there are steps that the board can take as far as whether to declare them in default or not because of non-payment of the annual fee.
>> do we know anything further or is that just an item for another day in terms of finding out about the loss of the exemption and how that occurred and what impact that has on the transaction that we did on their behalf and, you know, how soon are they going to owe property taxes and --
>> they have -- I think this was the second year that the exemption was -- the property tax application was denied by the appraisal district. However, the reason it was denied this year was different from the last -- the prior year, and it's kind of a technical issue in that the appraisal district said they had set up the companies incorrectly. So they are appealing this, so I don't know the outcome. But obviously it doesn't seem fair that our annual fee should be held hostage to, you know, their not having set up the transaction properly so that, you know, the appraisal district is denied.
>> obviously what's happening there is they are holding those dollars, you know, with perhaps having to pay those property taxes, and so we're just down the rung with regards to our fee being paid. Isn't that -- I mean reading the tea leaves, harvey, isn't that what's going on?
>> yes. But the this was the first year that the annual fee was -- and the way these transactions are set up is that payments come in priority, and so the annual fee is not, you know, the operating expenses are sort of the first priority, and then the interest and principal payments on the bonds is a higher priority, and so the annual fee becomes, you know, down the list, and if there's not money there, then they can, you know, withhold the annual fee until things get better.
>> well, what leverage do we have in terms of saying, well, it may not rank in terms of importance to you, but it ranks number one in terms of importance to us? How does the lack of not paying this fee impact any transaction that they have had through this board in terms of compliance or non-compliance that gives us some options as well?
>> not being an attorney, but my understanding is that if they don't pay the annual fee, then they would be in violation of provisions of the trust indenture. And so the board could say to the trustee, our annual fee hasn't been paid, so this would be an event of default. So then an event of process would start.
>> I'm not speaking to go down that path, but the idea of the letter stated that all of a sudden might put our fee at a higher rung on the ladder related to the importance of what they pay first.
>> right. Or motivate the corporate office to go ahead and fund it.
>> to figure something else. That's not point is not to have them lose status, but for them to do the deal. It works two ways.
>> the budgets for the corporation are contained in exhibit a?
>> yes, sir.
>> move approval.
>> second.
>> any more discussion? We probably ought to have another item on the agenda for these two complexes, I guess.
>> okay.
>> and judge, is this a motion on the budgets for all of the corporations?
>> yes.
>> thank you. I'm just being clear.
>> all of them as set out in exhibit a. Any more discussion? All in favor? That passes by unanimous vote.
>> move we adjourn the facilities, capital industrial, capital health development corporation.
>> all in favor? That passes by unanimous vote. One item left under the housing finance corporation. That is number 2 to consider results of compliance audit of fort branch landing apartments and take appropriate action.
>> I did a compliance audit of the four branch -- fort branch landing apartments last July. These apartments are located at 5800 technic center drive, which is near the east Austin ymca or mlk and 183. Over all, I found the compliance to be in excellent shape. The tenant files are very good. This apartment complex also has tax credits from Texas department of housing affairs. They had done an audit prior to my coming out and had a clean bill of health. I did have three issues that I have that I wanted to discuss with the board. The first issue is that the income -- they were not using the income certification that is part of the regulatory agreement. The -- they were using the tdhc or Texas department of housing community affairs income certification forms. And the regulatory agreement says that they are to use the form that's in the regulatory agreement unless the board approves another form. The second issue was that the income certifications were not notarized and the income certification form does provide for notary -- notarized signature. Then the third issue was that they have -- had not submitted an annual eligible tenant report that's due each December, and that report basically says that they are in compliance with the eligible tenant leasing requirements. Since the audit, they have submitted that report, so really that issue has been resolved. With regard to the income certification form, they are requesting to be able to -- instead of using the form that's in the regulatory agreement to use the tdhca form. So we have given -- asked bond counsel to review the tdhca form and see if it was okay to use those forms instead of the forms in the regulatory agreement. Bond counsel did -- which is vinson and elkins, said that using those forms would be -- would not cause a problem as far as the tax exemptness of the bonds. So I am recommending that the board allow for branch to use the tdhca forms. I think it makes sense because otherwise they would have to fill out two income certification forms. And the tdhca form has, you know, actually more information than the form in the regulatory agreement. They -- bond counsel also said that the notarized signature -- that internal revenue service does not require notarized signature anymore. They do require a warning of -- on the signature page that says that I under penalties of perjury, that I -- that the information submitted is true and accurate. The same sort of statement that you sign when you sign your income tax return. And they said as long as that statement is on the income certification form, then that is sufficient as far as the tax exempt goes with the bond. And so again, I'm recommend to go the board to allow them to have the income certification without the notary and the rationale is that it just -- it makes it exactly parallel with the tdhca requirements. And sometimes it's hard at these apartment complexes to always have a notary at the site. The other thing -- I didn't have this in my write-up, but they do have an after-school care program that I looked at that it's run by the ymca, and I was very impressed. I talked to the ymca personnel. The owners pay the ymca $1,500 a month to subsidize the program, and then allow them to use a special -- a building that they have rent free. The y pays utilities. And the tenant pays a sliding fee schedule according to their income. And when I talked to the ymca personnel, they were really high on the program, that it had been -- gone very well, had a good summer school program. So I did want to report that they do have a real nice after-school care program. An active one going on out there.
>> so your recommendations are permission to use the tdhca certificate, income certificate form.
>> yes.
>> and then not to note rise, but to sign -- notarize, but to sign with the loan was a statement similar to what the s.uses.
>> yes, sir.
>> [indiscernible]. I move approval.
>> second. Any more discussion? All in favor? That passes by unanimous vote. And there's a third issue involving tenant eligibility certificates?
>> yes. And they have -- they have submitted the form. So that is, I would say, is a non-issue. And according to our policy, I would classify this as a minor issue so that I would go out and do a follow-up audit within 12 months to make sure that they have implemented these procedures.
>> okay. Thank you very much.
>> thank you.
>> anything? Does that take care of it.
>> move adjourn.
>> second.
>> all in favor? That passes by unanimous vote.
>> item 30 is consider and take appropriate action --
>> judge, did we need road district?
>> do we have road district back there?
>> golden triangle.
>> no investments, no claims.
>> thank you. I did call back to order the voting session.
>> yes.
Last Modified: Wednesday, September 16, 2003 7:52 AM