Held at Kabir's house. In attendance: Jonathan Machen, Kabir, Gene Langlois, Alex Wilson, Barbara Navin, Roger Lewis.

The management committee identified the need to define community and non-community areas of the park. We would like to team up with Julie in this matter.

The issue of a resident’s lot that existed now but ‘should not exist in the future’ was discussed, but nothing was figured out. To compound confusion, Hast has told us that the home-owner never went through the proper channels when he assumed ownership of the home, so he never communicated with anybody to begin with. Barbara Navin of Thistle was asked to consult with Bill Windsor of Thistle on this issue.

A discussion was had about what to do with the City building department's inability to monitor building-permit issues. Aside from general frustration being aired, nothing was decided. Jonathan contacted the manager of Orchard Grove park to compare notes. The manager mentioned that she tries to keep the city at arm's length, but that they don't have problems with them coming out.

There are unfinished projects that the City of Boulder’ public works department has not finished yet, left over from construction of the Goose Creek Channel. Hast Management company has sent a letter to Douglass Sullivan, the gentleman in charge, asking for the status of those projects.

Budget discussions:

Roger Lewis gave an overview of the proposed budget for the fiscal year of 2005-2006, laying out the overriding principles that will lead to a successful park operation into the future. In a nutshell: (Roger’s edits in Bold)

 Roger observed -  we are working with certain principles in mind, along with the #1 goal of keeping the rents as low as possible:

1st principle: pay all operating obligations that are 'above the line', which includes the operating expenses and debt service.  The income and expenses reflect the income/expenses associated with running the park.

2nd principle: of extra cash, we fund replacement reserves, so we have money in the future to maintain community.

3rd principle. Thistle's finance committee asks that the interest on the money owed to Thistle be paid first. This pays interest on the development fee that has not been paid.  The development fee is typical in all Thistle developments; these funds are put into other affordable developments (Actually this pays off Thistle's development committee - paying the interest down)… the interest payment does not pay down the development fee. These funds will go back and recycle into new projects - such as, the home on lot 81. (so this is already benefiting MHA).

Jon's question - how, if all the money paid off goes to paying off interest, does Thistle have more money to put back into projects? Does it mean they can get additional loans because the principal is still there? Roger answers...the less debt that you have the better off you are at refinance (can borrow more money).

4th principle. the priority of generating funding to the phase two infrastructure - 80% of cash left over would be distributed to a phase 2 infrastructure project. If the 80% number remains the same over time, $280,000 will be saved. Most of the excess cash is all going there. The remaining 20% is split between Thistle and the MHA. We could shift this...if this was 40%, we only have $140,000, but Thistle would have to rely on grants or other things to raise more money. The advantage of having cash flow money is that it leverages grant dollars more easily...such as in matching funds.

5th principle - a 50/50 split at the end of the day….the payment to Thistle in this 50/50 would be to pay down the principle of the development fee.  If MHA wants more funds, then MHA can propose a more favorable split to MHA.

We can wrestle with the MOU stuff in the fall.

The principles above don't change over time. However, expenses do change. (40% of all the money that comes in is going back out to the bank) - money is drawn because the debt service will go up - This is because of the way the bonds were issued. The debt service doesn't stabilize until 2007-8.  The bonds were structured favorably at the front end, done strategically by Thistle.  Cash out is reserves – for now, only $9000/yr for reserves. After refinancing is done, the reserves have to stabilize at $30,000/yr. Wishes Lou Nuttall had fixed things more regularly. Since we are non-profit, we are here forever. (note: unless eminent domain restrictions cast a pall over our community...more on that laer). ed. We put money into reserves and in 30 years we have $1,000,000. We couldn't do that if we were for-profit. (the IRS would tax that). We have the problem of what seems like a lot of cash, but it isn't there because it's going into this reserve fund. This year, we could have dumped the extra $30,000 into reserves, but we didn't; we split it. (editor's note: these numbers have since been revised). see revised numbers (not much excess this year).

Two areas of increases for next years budget that are higher than this year's budget: the debt service on the bonds and payment of thistle's debt. and, - the disbursement to MHA is very low in the next 17 years -

The excess cash in this budget goes to help reduce the interest - …the interest payment on the development fees reduces the funds available for the construction reserve and distribution to MHA/TCH - this is a result of Thistle's finance committee's recommendations.  This second payment will reduce the principle amount owed to Thistle.  The more principal you pay, the lower the interest is, and Roger points this out - the amount of interest payment on developer's fee is going down... this will free up cash later on...so at the end of the refinancing period (2021) instead of $130,000, it's only $72,000 when you refinance.

A budget based on these principles keeps the goal of keeping rents low.

So, it's good we don't have a bunch of excess cash at the end of the day. By the time we refinance, we are in a better position.

 So - we still have to ask, what are the goals of MHA and how does the budget intertwine with those larger goals? Roger thinks this budget will provide a good foundation for the basic operation of the park, keeping affordability in mind, but the MOU we should revisit – the  principles of which we should talk about, so every committee every year

We may want to call the MOU our operating agreements..how are we working together!

Submitted by Jonathan

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