Attendance: Etta Habegger, Jonathan Machen, Nick Tamm, Jim Harrington, Roger Lewis, Aaron Mirapol, Gene Langlois, Barbara Navin, Kathryn Alexander, Mark Reeder, Bill Windsor, Ben Jensen, Silvia Gentile, Kabir, Joe Gonzales

To do:

1)             Tier transition data – KA (this is in these notes)

2)             Matrix – KA and Etta Habegger

3)             Accounting issues – Etta, Roger, KA, Silvia

4)             3% increase in Proforma – Bill

5)             List of 6 reserve accounts – Bill

6)             CLT and other increases scheduled – Accounting Group (Etta, Roger, KA, Silvia)

7)             Define needed meetings and schedule

Next Meeting: March 5 or 6 9am to 1 pm at Thistle

Thistle has new people on the Board. The department that have had the most involvement with Mha are: Development – acquisition; Finance – costs, over runs and budgets; CLT Committee – management concerns. The staff has supported the Mapleton project since the beginning as aligned with the mission of TCH. As the project transitions, Barbara and the CLT will have the most concern for the day-to-day issues, with Roger and Etta involved in the long-term management.

Key Bond Document Review

1)             a & b – TCH and MHA will need to address these issues with the City of Boulder. The best time would be after a number of sales have needed to use the Exit Clause, but before all eight opportunities have been used. This is especially true if it seems to be used a lot. After the park has created a measure of confidence in its management. The greatest strength seems to be in the earlier documents that the City signed which clearly show the “intent” is to have flexibility in dealing with residents.

2)             OK – the agreements are no different, the lender is added.

3)             After the Bank sees the Park management as stable they may then be willing to renegotiate the one year lease limit. (perhaps in two years)

4)             This adds the Bank to the MLLC agreements. The right to cure continues, but if not cured then MHA will loose he 99 year lease. The COB is also in line and there are other resources (Neighborhood Reinvention) that will help too. Communication is key – if all partners are included consistently (COB/Bank/ Neighborhood reinvestment) then trust will be created and people will be more flexible.

5)             There are 6 different reserves (insurance, taxes, improvements, replacement…. – Bill to send a list) this means that the Bank will require that MLLC ask to use the money and be able to explain why. TCH has an established process that usually allows them to receive the money within 48 hours. Again, communication, a good history to build trust are key.

6)             There is a $210,000 shortfall for TCH. This means that MHA owes TCH $210,000 – to be paid over time – without interest.

7)             We need to get a projected time line for tier transition. Currently there are: 70 units at 30% AMI; 24 units at 40% AMI; 16 units at 50% AMI; 8 units at 60% AMI and 6 at market. The MOU requires: 65 units at 30% AMI; 30 units at 40% AMI; 15 units at 50% AMI; 10 units at 60% AMI; and no more than 15 units at market.

Roles and Responsibilities

Due to the complexity and density of the Management Plan document it was decided that Etta and Kathryn will create a matrix to show the Roles and Responsibilities – Kathryn to take the lead.

The biggest issue is the accounting – how to track the various aspects of the project and who is involved and how. This may be month long project. Clarification of the Park operating – MHA operating – and Infrastructure costs and incomes are needed.

Etta, Roger, Kathryn and Silvia agreed to work on this.

The first round of infrastructure TCH will lead with MHA learning. Maintenance and second round MHA will lead.

Bank needs to sign off on a change in the management company.

Proforma

            The costs of the infrastructure are being suggested as $1,950,000. We should know the “real” costs in a few weeks. Value engineering will help determine what can be done with the money we have. TCH is writing additional grants (St. James, NCR) to try and increase resources. If we can’t raise enough money to do all that needs to be done, then we will manage that gap through Capital Planning.

In year three the debt service increases (adding the construction costs) and we start paying on the principle. We also start paying into Capital reserves and add five additional home sites.

Proforma includes/omits 2 non-paying sites. There maybe a third, depending upon the management situation.

We need to ensure that the increase in rests is only 3% - it seems larger in years 4-5. Bill to check on this and do “sensitivity”  scenarios.

If we focus on needs – how are the needs getting met and can communicate that to residents, it should save a lot of misunderstandings.

Buckets

            Infrastructure may need money past the third year (Bucket #1).

            Bucket #3 means that TCH is being paid back for the $210,000 at $17,000 at year.

            All numbers are just speculation now. Accounting team will clarify and both TCH and MHA need to see what numbers meet their needs. This will mean further discussion later.

            Need to model after three years without increases and see how it impacts buckets.

            Adding line items to the operating budget may affect the Debt coverage Ratio (DCR)

            We need to better understand the issues involved in reducing the $21,000+ collection loss.

Joe brought this model to everyone’s attention as a way to show that we will all grow in understanding as the process goes forward.

Infrastructure Time-Line

            At this time – begin in the Spring – earliest is April 4 – COB

                                                                        April 4 – May 30 – Drexel

            Construction first thoughts 6 – 8 months

            Best guess                      8 – 12 months

            Completion to 70% by the end of 2005, final 30% in the Spring  of 2006

            Design group  - joining meetings with MHA/TCH/Drexel/engineers is defining scope

            Once construction starts – weekly meetings with MHA interface with residents

            Design group doing value engineering and coming up with other options to help residents.

Other Issues

            Yearly leases interfere with long-term home financing.

            TCH is tracking home mortgages and those institutions that give them to try and reduce interest costs

            This may need to be renegotiated with the Bank.

            Also the COB needs to be addressed re: ground set homes

            TCH expects to begin  this process within three years. Issues brought to the Management Committee and the CLT may move this forward – due to residents needs and other considerations.

            Colorado Rural Housing Development has a model we might look at.

            We need to be conscious of ways to address the tendency of developers to take advantage of changes in regulations.

Submitted by Kathryn Alexander, Community Coordinator

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