Travis County Commissioners Court
June 3, 2008
Housing Finance Corporation
Let's call to order the Travis County housing finance corporation. Director Davis had an emergency come up over lunch and will not be with us this afternoon. Item number 1 is to consider and take appropriate action on request to authorize a release of lien for a first-time home buyer that repaid a loan executed on may 25th, 2007.
>> good afternoon. I’m harvey Davis, manager of the corporation. And this first-time home buyer purchased a home in Mustang Ridge, and two months after he purchased the home, he was informed that it was going to be taken by eminent domain to build highway 130. He bought it in a foreclosure proceeding and so he had no idea that this was going to happen to him. And so he negotiated with the state for about 10 months to try to get a fair price because of course when he was foreclosed on, then to buy another house he was not a first-time home buyer and he would have to repay our 2,000-dollar loan plus the # 8,000-dollar loan to the state, but -- he had a really good real estate agent, but he was able to get enough funds to where he was able to buy another home in the lockhart area. So it sort of had a happy behinding. -- a happy ending. But the funds have been repaid to the corporation by stewart title, so they have asked the corporation to release the third lien, this was the third lien that the corporation had, and so we recommend approval of their.
>> move approval.
>> second.
>> discussion? All in favor? That passes by unanimous vote. Number two is to consider and take appropriate action on responses to internal revenue service examination of the lakeview apartment project multi-family housing revenue bonds, series 2001 a, b and c.
>> I’m here with cliff blunt, our attorney, be and I believe that mr. Blunt wanted to consult with the board in executive session.
>> as a response to the request made last week, it's your pleasure whether -- it would be advice from me, so --
>> is it advice that we need to take behind closed doors? It's about lawyer fees, right?
>> yes, sir. I’m okay with not.
>> we've been trying to promote transparency down here, mr. Blunt.
>> I’m happy to do that. We did contact several tax lawyers that specialize in this particular field. I think first of all we had an estimate at least initial costs from fulbright & jaworski who is acting currently as bond counsel for the corporation for new transactions. The hourly rate from that attorney is $590 an hour, and in her initial estimate was that it would be in the 3 to 4,000-dollar range to handle the initial response to the i.r.s. Audit. And I did contact several other law firms that have similar specialties. Vincent and elkins was in the same range, actually probably slightly higher for partner level. Personnel level, slightly lower. I think I got 385 to 485 for associates of v and e of anywhere from 550 to 650 for partner level folks at v and e. I think we had -- in response to a request for a proposal last year, we had the winstead tax lawyer out of new york was at $500 a little over a year ago. I did not get a phone call back from them to verify, but it will at least be at least that if not higher. Probably higher over the last year.
>> they don't give a government rate?
>> [ laughter ] they should! Come on.
>> apparently only I do.
>> [ laughter ] and then I did speak with mccaul parkhurst, two lawyers who do this tax controversy work, and they wouldn't really give me an hourly rate. I think reading between the lines, I think their younger associate would be in the 350 to 400-dollar range, and then the elder associate probably up around $500. Like I say, they did not give me an exact rate, but just piecing together several things from our conversation, I believe that's about where they would be. So my recommendation would be to hire fulbright because of the relationship. The rates are all in the same category and we do have an estimate of the initial -- the cost of the initial response.
>> so did we ask the i.r.s. For the extension?
>> yes. I talked to the agent last week and was granted the extension. We've sent her some information. She did inform us it was a limited scope audit on arbitrage, which I don't feel in this situation that the borrower purchased an existing apartment complex, so almost funds were used immediately. That arbitrage is going to be a significant issue. The trustee of the bonds was jp morgan chase who sent that -- has sold their trust division to language of new york. And so I’ve contacted the trustee of bank of insuring to get information about arbitrage calculations, which was required by the borrower to do, and they're pulling those files and not having gotten information back from them. As far as what kind of rebate calculation had been done by the trustee.
>> any other commence or questions?
>> I move approval. And do we need to put in there with fulbright & jaworski?
>> authorize the payment of those fees in the range mentioned from the housing finance corporation --
>> and the execution of a power of attorney, which would -- on the power of attorney, which we recommend would be cliff and joey boyd, who is the tax attorney at fulbright.
>> that's included. Second? Discussion? All in favor? That passes by unanimous vote.
>> move adjourn.
>> second.
>> all in favor? That carries unanimously also. Thank y'all very much.
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Last Modified:
Tuesday, June 3, 2008 12:51 PM