Travis County Commissioners Court
August 31, 2004
Housing Finance Corporation
Now let's call to order the Travis County housing finance corporation 1.
Consider and take appropriate action on funds available in fy 05 for transfer
to Travis County. Mr. Davis.
>> good afternoon, him harvey Davis, I知 harvey Davis, manager
for the corporation. I think mary may has prepared the backup information
regarding the Travis County housing finance corporation. We aren't recommending
that they are -- that there are funds available at this time for the transfer
to the county. I will add that we are -- I am discussing with our financial
advisor and cliff blunt some opportunities with a 1994 bond issue in which
there may be some residual income from that program that would be available
and so we may be coming back to you, before the end of this budget year, with
a -- with some possible funds there. In the range of $100,000.
>> questions? Thank you for the news, mr. Davis. 2. Consider
and take appropriate action on three invoices for compliance audits.
>> this issue, this item, I am requesting permission to send
three invoices for work that we did on three compliance audits. The total
amount of the invoices, which is detailed in your backup is a little over
$1,200.
>> you have an appropriately threatening letter that you
send out as part of that request routinely?
>> I send a -- well, to start off with a non-threatening
invoice. [laughter] asking him to -- to reimburse us --
>> move that we delay the threatening letter and send the
invoices to each these three that owe us money.
>> second. [laughter]
>> you the one that signs the letter? Mr. Davis -- and mr.
Davis be authorized to sign that letter. Discussion? All in favor? That passes
by unanimous vote. 3. Receive briefing from corporation attorney and take
appropriate action regarding collection of past due annual fee from american
village communities, inc. For the metropolis apartments. Speaking of threatening
letter [laughter]
>> I have plenty of them.
>> well, let me just brief on before you talk with our attorney.
This -- these bonds were issued in 2001. The -- the owner is a -- is a chodo
so they are not paying property taxes. The amount they owe that is past due
is 19,035. They did pay the annual fee in 2002 and in 2003. The -- the --
they have been in -- in default on these bonds for the last 18 months. Which
-- and the owner told me that as of today they are short about $37,000 a month
to make the payments on their -- the interest and principal payments on the
bonds. Their occupancy out there is at 92%. So it's not -- you know, it not
like some other situations but the rents have declined significantly since
2001. He says that his -- their budget right now is that they would have sufficient
funds in October of 2005 to -- to be able to make their interest and principal
payments on the bonds, but not be able to pay all of the past due amounts.
So that's -- you know the situation that -- that we face now on this particular
issue.
>> have we ever had a situation like this before?
>> oh, yes.
>> we've -- we have two other situations like this, both
are -- the ownership of a chodo in which they are exempt from the property
taxes.
>> but not from our fee.
>> that's true, right.
>> what do we do in the other two cases about getting the
fee that we deserve?
>> well, in one situation we have the agreement with the
owner in which they have reserved 10 apartment units for people, for elderly
and disabled tenants at 30% or less of median income, in which we have a program
with family elder care and the reports that I知 getting is that this program
is working very well. I am scheduled to go out and do an onsite audit on September
9th, this year. To -- to, you know, look more -- in more detail about the
progress on that program. And on the other program, which is -- which is the
parks at wells branch, we -- we are just -- that one is -- they are two years
past due on paying the annual fee. And we are -- there's, you know, at this
time we are just hoping for better economic times out there.
>> we're waiting on the next presidential election it looks
like to me, mr. Davis.
>> I would say in all three of these instances the loan agreement
provision and the refresh my memory of paying the issuer fee, if they are
not paying, they will continue to accrue until there are enough money if the
funds to pay it. Probably more of a timing issue than is it ever going to
be paid issue. We are not going to waive any rights or not receive the money.
So in this one the metropolis, the occupancy rate is not too bad, so once
the rents are firmed up, as the economy continues to improve, we hope that
it will come around.
>> is this something that we ought to put on our list of
things to bring up with our legislative delegation. Because they gave us this
chodo mess and quite frankly, I would like to see if there's something creative
that can happen that can give corporations like ours around the state some
teeth in dealing with folks who are getting the benefit of the tax exemption
without properly taking care of business in terms of what the terms and conditions
were of the contract that they entered into to begin with. I think that it's
worth a conversation.
>> the chdo laws did change significantly.
>> appropriately.
>> at the beginning of this year.
>> our new -- I knew representative rodriguez was one of
the ones that god that change in the law because of some of the abuses that
were out there. I think it would be worth a conversation with eddie and others
to see if they might be able to craft something that adds this kind of thing.
>> what appropriate action if any is recommended today?
>> I think this item is just under you all's policies, to
make a report, let you know what's going on. At this point the options are,
there's no claim that the money is not owed, no claim that the -- that they
shouldn't pay it for any reason. It's just that there's not enough money in
those funds, the property is not cash flowing enough to pay these fees. So
I知 not sure that I would recommend filing a lawsuit because we would just
have another claim to the same money when it's not really being disputed that
its owed. I think my advice is that we kind of monitor the situation and make
sure that -- that things continue to go better.
>> I know this n that other one, judge, we actually asked
those folks to come in and come talk to the corporation, basically trying
to lay out a plan to try and deal with it. Can we request them to -- to come
talk to us and let us know what their feelings are about this, what their
plan is?
>> [indiscernible] in virginia, he's very cooperative, I
feel that he would be more than happen to schedule a time in the next few
weeks or months to come in and talk about that.
>> [indiscernible] that we can also probably acquire information
I guess from the previous [indiscernible] to see how much property taxes that
these persons are -- are really not having to pay anymore. I think that would
give me a kind of an indication to look at the -- look at the property taxes
that they would be paying into the property tax base, but of course they are
exempt from this because they are a chodo as opposed to the occupancy rate
and stuff like that I mean that's -- that's in itself ought to be a significant
figure just that particular property tax not being paid. So kind of hand and
foot type of situation as far as I知 concerned. I would like to see exactly
what the -- what the property tax waiver equates to.
>> yeah, I -- I don't have that figure.
>> I know. I think that it would be -- I know that you don't
today. I think it would be good to see that. Especially when we are dealing
with these chodos.
>> any objection to us asking the owners or managers or both
in number 3 to come down to chat with us about -- about what we -- about when
we can expect payment of the fee?
>> judge. I would say that it's, I mean, unless we want to
get an update on vacancy rates in the city I知 going to tell you that the
managers aren't going to be the people -- maybe we would just like to hear
what their crystal ball is, but the ownership, I mean, where you really have
the stroke here, that is who we really need to have before us. I mean to have
some sort of a plan and to make sure, cliff, that we have everything buttoned
up with regards to how we get in line, I mean, because, you know, this unfortunately
really starts to unravel in a lot of different places. I mean when your occupy
peaps he is not there, when your levels -- with your occupancy is not there,
when your levels that you pay to stay in those apartments aren't really up
to speed everything starts going, maintenance start going, properties become,
you know, very stressed. It really is the beginning of something that could
be very ugly for us. Then, you know, obviously you would have the bankruptcy
capabilities of everybody. Once that starts then you really have a long line
of -- of maneuvering that you can -- that you can legally do. And we all know
what happens with bankruptcies. People start taking percentages of things
that they have owed them. I mean I think that we obviously have seen some
of the shortfalls of what chodos can do, even though the design behind them,
I mean, as is often the case, we are supportive of things that allow people
to finance properties predicated on that they are going to have cheaper rents
to accommodate people in need in this communitiful what we are trying to get
-- in this community. What we are trying to get done is something that's meritable.
Unfortunately always from a business angle, you've always got to make sure
that you have an exit clause capability. Where do you get yourself protected?
The unfortunate thing is it's hard to protect yourself when the worst happens.
The worst probably can happen because the property that I知 imminently aware
of is the metropolis and, you know, that thing is probably not going to get
a whole lot better, I mean, when it if he is started why I am it had kind
of a unique life out there. But I think that we need to make sure that we
get ownership here and on lot of times these guys are from out of the city
or out of the state. Unless -- let's make sure that we have -- that we are
going to expect them to come and say what is your game plan. Let's make sure
from a legal standpoint that we don't get outmaneuvered. That we keep, you
know, our abilities to cash in because you are right. I mean, I think these
things happen is when they get sold. But unfortunately when they got sold
is when the price is such that people come in and -- and getting them to abide
by whatever covenants there were previously is sometimes difficult. But I知
-- sounds like, you know, we have kind of been had and sometimes you kind
of get had and then trying to get out of it is tough to do. I think that's
the best move to do, judge, get them in here and let them tell us what they
are going to do and plan the attack from there.
>> in this situation the owner is all state. I think that's
a good idea. They are the ones that control things.
>> all state owns the bonds. The owner of the project is
a.b.c. Metropolis a.b.c. Inc., But all state owns the bonds. They are working
with the owner of the project on the workout at this point.
>> opener in Austin or boston?
>> the owner of the project is in virginia.
>> we want them to fly down here, send the ticket money to
us and a letter.
>> I think the owner makes -- it's a periodic visits.
>> Commissioner Daugherty moves that we request that the
owners of this project come and give us a status report and let us know when
we can expect payment of the amount owed.
>> second.
>> discussion? All in favor? That passes by unanimous vote.
>> sniewf adjourn.
>> second.
>> all in favor? That passes by unanimous vote, too.
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Last Modified: Thursday, October 27, 2005 10:59 AM