HOUSING OPPORTUNITIES COMMISSION OF MONTGOMERY COUNTY

HOUSING OPPORTUNITIES COMMISSION OF MONTGOMERY COUNTY

10400 Detrick Avenue

Kensington, Maryland 20895

(240) 773-9025

M I N U T E S

April 9, 2003

03 - 04

A regular meeting of the Housing Opportunities Commission of Montgomery County was conducted on Wednesday, April 9, 2003 at 10400 Detrick Avenue, Kensington, Maryland beginning at 7:12 p.m. Those in attendance were:

Present

Richard Y. Nelson, Jr., Chair

Norman Cohen, Vice Chair

Y. Monroe Galloway, Chair Pro Tem

Ralph D. Bennett, Jr.

Michael J. Kator

LaKeyia L. Thompson

Also Attending

Scott Minton, Executive Director Ken Tecler

Annie Alston Bill Murphy

Lillian Durham Stuart Raynor

Peter Engel Earl DeMaris

Zachary Smith Harold Kramer

Scott Ewart Patrick Mattingly

Lembit Jogi Bryan Luntz

Bill Anderson Vivian Benjamin

Jim Atwell Lisa Hudson

Bobbi DaCosta Gail Willison

Arthur Owens John McIlroy

John Rossbach Doub Ryan

Bryan Isler Brian Kim

Louis Chaney Andrew Oxendine

Mike McGinn Jane Harrah

Dana Miller, Special Assistant to the Commission

Guests

none

Chair Nelson convened the meeting of the Housing Opportunities Commission at 7:12 p.m. He then called for consideration of the Consent Calendar. Vice-Chair Cohen moved, seconded by Chair Pro Tem Galloway, to approve the Consent items. Affirmative votes were cast by Commissioners Nelson, Kator, Thompson, Galloway, Bennett and Cohen.

I. CONSENT CALENDAR

A. Approval of Minutes of March 5, 2003 - The minutes were approved as written.

B. Approval of Special Teleconference Minutes of March 26, 2003 - The minutes were approved as written.

C. Approval of Record of Public Hearing of March 19, 2003 - The record was approved as written.

D. Approval to Project Base Units for Mental Health Association - The following Resolution was adopted:

RESOLUTION: 2003 - 29 RE: Approval to Project Base Units for Mental Health Association

WHEREAS, the Housing Opportunities Commission of Montgomery county administers a Housing Choice Voucher Program; and

WHEREAS, the Housing Opportunities commission approved the use of funding for project based vouchers on January 23, 2002; and

WHEREAS, the Housing Opportunities Commission approved a project based program size of no more that 560 units on November 6, 2002; and

WHEREAS, the Housing Opportunities Commission approved the selection of 558 units for project based voucher funding for private landlords on April 17, 2002 (121 units), November 6, 2002 (141 units) and on January 22, 2003 (seven units), March 2003 (16 units) and for HOC-owned units on November 6, 2002 (275 units); and

WHEREAS, the Housing Opportunities Commission continuously works to expand housing opportunities for residents of Montgomery County and approval of additional project based units will guarantee the availability of units to extremely low income families.

NOW, THEREFORE, BE IT RESOLEVED by the Housing Opportunities Commission of Montgomery County that it approves the use of project based funding for five units for the mental Health Association of Montgomery County, a not-for-profit chapter of the Mental Health Association of Maryland and a reduction of five units in the size of HOC-owned project based units (275) to accommodate the Mental Health Association’s units.

E. Approval to Close RFP for Project Based Vouchers Issued March 2002 - The following Resolution was adopted:

RESOLUTION: 2003 - 30 RE: Approval to Close RFP for Project Based Vouchers Issued March 2002

WHEREAS, the Housing Opportunities Commission of Montgomery County administers a Housing Choice Voucher Program; and

WHEREAS, the Housing Opportunities Commission approved the use of funding for project based vouchers on January 23, 2002; and

WHEREAS, the Housing Opportunities Commission approved a project based program size of no more that 560 units on November 6, 2002; and

NOW, THEREFORE, BE IT RESOLVED BY THE by the Housing Opportunities Commission of Montgomery County that it approves the closing of the RFP for project based voucher funding since all units are designated and no additional funding is available.

F. Approval of FY 03 Third Quarter Budget Amendment - The following Resolution was adopted:

RESOLUTION: 2003 - 31 RE: Approval of FY 03 Third Quarter Budget Amendment

WHEREAS, the Housing Opportunities Commission adopted a budget and personnel complement for FY’03 on June 12, 2002; and

WHEREAS, the Commission’s budget policy allows for amendments to the budget; and

WHEREAS, the Commission has reviewed a proposed technical budget amendment to the FY’03 Budget; and

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County, that it hereby amends the FY’03 Operating Budget by increasing revenue and expenses in the Public Fund by $49,999 for a total Agency Operating Budget of $161.2 million.

G. Authorization to Form Development Corporations for Diamond Square, Greenhills and Brookside Glen Apartment Developments - The following Resolution was adopted:

RESOLUTION: 2003-32 RE: Authorization to Form

Development Corporations

for Diamond Square, Greenhills and Brookside Glen Apartment Developments

WHEREAS, the Housing Opportunities Commission of Montgomery County wishes to issue tax-exempt bonds to prepay the mortgages on Diamond Square, Greenhills and Brookside Glen Apartment Developments; and

WHEREAS, the Housing Opportunities Commission intends to insure the mortgages on the properties under the Federal Housing Administration (FHA) Risk Sharing Program; and

WHEREAS, FHA requires that the borrowing entity for each transaction be a single asset borrower; and

WHEREAS, the Housing Opportunities Commission wishes to file the appropriate documents to create a development corporation to own each property; and

WHEREAS, the Executive Director can execute the necessary documentation to create the development corporations.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County, in the interest of establishing development corporations to own the Diamond Square Apartments, the Greenhills Apartments, and the Brookside Glen Apartments Developments.

1. The staff and the Commission’s General Counsel are authorized to develop, and file the appropriate documentation to create the Diamond Square Development Corporation, the Greenhills Development Corporation and the Brookside Glen Development Corporation.

2. The Executive Director is authorized to execute the documentation necessary to create the Diamond Square Development Corporation, the Greenhills Development Corporation, and the Brookside Glen Development Corporation.

II. INFORMATION EXCHANGE

A. Executive Director's Report - Mr. Minton added the following items to his written report.

1) Mr. Minton informed the Commission that a recognition ceremony was held on April 8^th for the volunteers in HOC’s offices and Resident Services programs.

Additionally, he notified Commissioners that Resident Volunteers of HOC’s Senior Communities have been selected for the 20^th Annual Governor’s Volunteer and Services Award under the category of “Senior Group.” The volunteers will be recognized at a ceremony on April 30^th.

2) Mr. Minton informed the Commissioners that Joshua Gaskins, Accounts Payable Clerk, had been deployed to Kuwait as a member of an armed forces reserves unit.

3) Mr. Minton informed the Commission that resident survey of the Georgian Court

community had been completed. Lillian Durham, Director of Resident Services, distributed a written report on the survey and spoke briefly about the demographics of the community.

Ms. Durham stated that there were a substantial number of families that requested after-school programming for children as well as summer programs. She explained that a summer coordinator will be hired to facilitate organized summer recreational programming at the new Community Center. The program will run in conjunction with the public school’s summer achievement program which provides free lunch.

4) Mr. Minton informed the Commission that the Grand Opening of the Georgian Court Community Center will be held on May 7^th at 11:00 a.m.

5) Mr. Minton directed the Commission’s attention to a letter from Secretary Hoskins. Included with the letter was a copy of the Governor’s Executive Order to establish the Governor’s Commission on Housing Policy.

There a brief discussion about HOC’s possible representation on the Commission. Chair Nelson stated that, in remarks made at the Affordable Housing Conference, the Governor stated that Montgomery County would be well-represented on the Commission. He stated that he is hopeful that HOC would be included in that representation.

Chair Nelson stated that the Governor’s Housing Conference will be held on October 30^th at the University of Maryland College Park campus. A brief discussion ensued.

B. COMMISSIONER EXCHANGE

Chair Nelson informed the Commission that he and Mr. Minton attended a meeting on April 8^th with Bart Harvey, President and CEO of the Enterprise Foundation. He stated that they discussed opportunities for HOC to partner with the Enterprise foundation. He stated that the meeting was positive and he learned of a number of potential areas for partnership. A meeting with the staff is being coordinated.

C. COMMUNITY FORUM - no comments made.

III. COMMITTEE REPORTS

Development and Finance Committee - Commissioner Bennett reported that the committee met on March 26^th to discuss the plan for the Montgomery Arms rehabilitation. He pointed out a change in the financing of the property. He stated that the rehabilitation is an excellent effort to preserve an asset. He stated that staff has developed an innovative way to maintain affordability in this project. He explained that the plan involves subsidizing the rents of several classes of residents, over several years. This plan would allow residents to maintain residency at the property.

Commissioner Bennett explained that the amount of funds requested from the Opportunity Housing Reserve Fund (OHRF) has risen from $500,000 to $1 million. He explained that hard cost estimates which have been received are approximately $500,000 higher than expected.

Peter Engel, Director of Real Estate, explained that staff is requesting approval of a resolution with language which specifies an OHRF loan that will not exceed $1 million.

Chair Nelson informed the Commission of his support for the request and made a moved to adopt the resolution. Vice-Chair Cohen seconded the motion. Affirmative votes were cast by Commissioners Kator, Galloway, Thompson, Nelson, Cohen and Bennett.

RESOLUTION: 2003-33 RE: Approval of Development Plan for Montgomery Arms and Authorization to Proceed

WHEREAS, the Housing Opportunities Commission of Montgomery County is the current owner of Montgomery Arms, located in Silver Spring and consisting of 132 garden and mid-rise apartments (the “Development”); and

WHEREAS, the Development is in need of significant rehabilitation in order to extend its useful life and to continue to provide affordable and market rate housing in the community; and

WHEREAS, the rehabilitation of the Development will contribute to the revitalization of the Silver Spring central business district; and

WHEREAS, staff has created a development plan for the rehabilitation of the Development, including a construction scope of work, construction budget, and development budget; and

WHEREAS, a construction contract has been negotiated with WCS Construction for construction services to rehabilitate the Development; and

WHEREAS, bonds are scheduled to be closed for the financing of the rehabilitation in July, 2003, while development plans call for construction to commence in April, 2003, and all conditions for an early start have been, or will be, met before commencement of construction; and

WHEREAS, HOC funds are necessary to complete the rehabilitation of the Development.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that:

1. The Commission approves the development plan for the Development,

including the construction scope of work, construction budget, and development budget;

2. The Executive Director is authorized to execute the construction contract with WCS Construction and all other documents in connection with the rehabilitation of the Development on behalf of the Commission, based upon the submitted materials;

3. The Commission approves the early start of construction for the Development;

4. The Commission approves a subordinate loan to the Development from the Opportunity Housing Fund in an amount not to exceed one million dollars ($1,000,000).

There was brief discussion about the Housing Initiative Fund (HIF). Mr. Engel informed the Commission of recent discussions with staff at the Department of Housing and Community Affairs (DHCA) regarding this project.

Budget, Finance and Audit Committee - Vice-Chair Cohen reported that a meeting was held on the 26^th of March to discuss and approve the FY 04 Public Housing budget. It was pointed out the Committee was authorized to approve the budget. The Committee approved the budget at the meeting and the budget was submitted to HUD on time.

Resident Advisory Board Liaison Report - Commissioner Thompson reported that the Resident Advisory Board (RAB) conducted its biannual survey of Public Housing residents in Senior Buildings. She stated that the majority of residents responded that they are “very satisfied” with the properties, units and services from the counselors.

Two areas which did not receive high marks are: visitor parking areas and tenant parking areas. It was noted that the low marks might be attributable to the lack of adequate parking, rather than concerns about cleanliness or maintenance.

Copies of the survey summary were distributed.

IV. DELIBERATION

A. Presentation of Executive Director’s FY04 Recommended Budget-

Earl DeMaris, Chief Financial Officer, introduced Gail Willison, Budget Officer, and Brian Kim, Assistant Budget Officer.

Gail Willison stated that she would provide the Commission with a brief overview of the operating and capital budgets, goals incorporated in the FY04 Strategic Plan and major changes in the FY 04 budget as compared with the FY 03 budget. She explained that the budget reflects income that is projected to cover the Agency’s operating expenses. It does not include many items in the Agency’s financial statements that are based on accrual accounting. It reflects only cash available to the Agency to cover operating expenses.

Ms. Willison further explained that discussion of the specific divisions and departments will take place during meetings which will be held in April and May.

Mr. Minton stated that the budget is approximately $175 million, which is approximately $10 million above the FY 03 budget. He explained that the increase is reflective of the increase of Housing Assistance Payments (HAP) the agency will receive as a result of the Lease-up Initiative.

Mr. Minton went on to state that the budget was impacted by many external factors, including federal and County reductions, increased retirement rates, increased health insurance rates and ongoing collective bargaining negotiations. He pointed out that certain operations of the Agency are being funded by HOC’s own revenue rather than government revenue. He noted that there is a reduction of 1.75 work years in this budget. He pointed out that staff has done considerable work to ensure that the Agency could avoid a Reduction In Force (RIF).

In response to a question by Commissioner Bennett, Mr. Minton stated that Pay-for-Performance is not being funded in the coming year. He added that one staff event (holiday party or staff appreciation day) would not be funded in FY 04. Mr. Minton explained that although the budget is balanced, it contains several policy issues for the Commission to consider.

Ms. Willison continued the presentation. Ms. Willison pointed out that the budget is approximately $175 million. Approximately 74% ($129 million) of the Agency’s total revenue comes from grants and operating sources which includes $45 million generated from the Agency’s properties. Approximately 26% ($46.3 million) of the budget comes from non-operating revenue. Commitment and development fees are included in non-operating income because the Agency is unable to control when those fees will be received.

Ms. Willison stated that, in FY04, non-operating income has increased due to the projection of additional development and commitment fees. During the FY 02 budget process, the decision was made to restrict 60% of development and commitment fees to the Opportunity Housing Reserve Fund for future capital projects. The FY 04 budgets continue this process

Although the Agency has a $175 million budget, approximately 93% of revenue is restricted. These restrictions are either bond requirements or internal requirements to cover the costs of operating and maintaining properties. What remains is approximately $12.4 million of discretionary income. Approximately $7.6 million of discretionary income is from management fees, $3 million from cash flow from HOC-owned properties; $1.2 million is from the portion of commitment and development fees that flow to the General Fund; and the remainder is from miscellaneous income.

Ms. Willison explained the sources of funds by stating that Federal, County and State grants account for 42.41% of revenues. Property related and management fee income are another 31.2%.

Non-operating income represents another 26.39% of the Agency’s revenues. Ms. Willison pointed out that 23.59% of HOC’s total budget is derived from interest income. This means that almost one-quarter of HOC’s budget is driven by interest rates.

Ms. Willison then focused on HOC’s use of funds. She stated that the Agency has very little control over how funds are used. Approximately 68% of HOC’s revenue must be used for non-operating costs and HAP payments. This severely limits the Agency’s ability to appropriate funds to other areas of HOC’s operating budget.

Ms. Willison, then discussed the capital budget. She explained that the capital budget includes funds for capital improvements as well as capital development projects. The capital improvement budgets for the properties do not include dollars that will be rolled over from FY 03 to FY04. It is still too early to project the amount that will be left at year end that we will roll forward.

The Capital development budget includes funds for the new 60 unit MPDU program that will be funded through bond financing, an HOC contribution and a matching County contribution. Approximately $15.9 million or 49.6% of the total capital budget will be funded through bond financing. The Government funds include the matching County money as well as funds from capital fund program - formerly known as the Comp Grant.

Ms. Willison briefly discussed the Agency’s strategic plan and the development of the budget to support the plan.

Mr. DeMaris highlighted several County Budget reductions which totaled approximately $260,000 in reductions to HOC’s budget. Mr. DeMaris stated that the budget maintains services to the greatest extent possible. As such, HOC was able to fund only a small portion of the Family Resource Centers through the County. Therefore, the budget reflects 75% of the cost of the Centers being absorbed in the Agency’s General Fund budget. Additionally, Mr. DeMaris stated that this budget does not have the resources to support the Furniture Warehouse Program; therefore, it is recommended that the program be eliminated in FY 04.

Mr. DeMaris stated that the cost of health insurance benefits increased dramatically in FY04 – almost 25% or $417,000. Additionally, retirement rates increased 13% or $117,000. This is the second year that both these rates have increased substantially.

Mr. DeMaris then focused on property income. He stated that HOC projects $3 million in net property income that will be available to help support Agency operations.

The County Executive’s in place rental increase recommendation was 5.4% this year; however, the rental market does not support that level of an increase. The property budgets assume in place rental increases between 1.2% and 3.5%.

Additionally, property liability insurance costs have increased dramatically this year -102%. There was a brief discussion on insurance rates.

With regard to the Housing Choice Voucher Program, Mr. DeMaris highlighted the following points. The Housing Choice Voucher Program projects a cash surplus of $233,010. This is the first time in five years that this program will be self-supporting. Contract activity is projected at 98% of the available units allocated to the Program. The budget proposes retaining six of the original 17 temporary staff that were hired during the FY 03 Lease-up program. All cash surpluses will be restricted to the HCV Program.

Mr. DeMaris then discussed the Public Housing program. He explained that, at the time the recommended budget was prepared and printed, the projected deficit for public housing was $613,600, based upon 90% funding for the operating subsidy. Subsequently, the calculation for the performance funding system (PFS) was refined. Staff calculates that HOC will receive approximately $227,000 more funding at the 90% level than was originally budgeted.

Most of this increase is attributable to the calculation of public housing rents, the allowable utility expense and the local inflation factor. Occupancy is lower than originally projected due to units that will be offline at Middlebrook because of the rehabilitation.

Staff now projects the FY04 deficit to be approximately $387,000. This will be funded from public housing operating reserves. The reserve balance on July 1, 2003 is projected to be $866,670. Therefore, staff projects the ending balance on June 30th, 2004 will be $479,670. The recommended budget assumes capital fund grant contributing $300,000 to the public housing operating budget.

Mr. DeMaris informed the Commission of several important developments for the Agency. Despite the fiscal constraints that HOC faces in the coming year, there is good news. Mortgage Finance and Development working together have, either through financing or capital projects, increased the number of new affordable housing units in Montgomery County by 556 units.

At the Affordable Housing Conference, the Governor announced that HOC will receive $20 million in additional bond cap over the next two years. The Governor also announced that additional bond cap may be available in future years.

Although Fannie Mae discontinued its Closing Cost Assistance Program, HOC was able to implement its own Closing Cost Program. The program will provide closing cost assistance in the amount of 5% for first time home buyers.

In January 2003, HOC was notified by the State that it had received a $300,000 grant from the Homeownership Program for the Community Legacy Area. This money can be used to provide closing cost assistance to firemen, policemen, teachers, and nurses in the legacy area – which includes Wheaton, Silver Spring and Long Branch.

Mr. DeMaris reviewed information pertaining to personnel, which Mr. Minton also discussed in his opening remarks.

In conclusion, Mr. DeMaris stated that the continued reductions in federal, state and county funds combined with the increase in employee benefit costs provided staff with significant challenges during the preparation of this budget. He stated that the budget continues to support Agency operations with income generated from our properties.

Mr. DeMaris explained that, although public housing will continue to operate at a deficit, we have sufficient reserves to fund this deficit. This budget is balanced with the use of public housing reserves.

Because of the uncertainty in predicting when commitment and development fees will be received, this budget only utilized 40% of the fees in the operating budget. The other 60% is restricted to our Opportunity Housing Reserve Fund and will be used for capital projects.

Commissioner Kator inquired about the decrease of 1.75 work years for the Agency, while at the same time, maintaining term employees from the Lease-up initiative. Mr. Minton and Chair Nelson explained that funds in the Housing Choice Voucher program are restricted and cannot be allocated to other divisions.

In response to a question by Commissioner Bennett, a discussion about use of excess cash flow ensued. Chair Nelson inquired about the need for a Commission policy on uses of excess cash flow. It was decided that the matter would be discussed during hearings on the General Fund.

There was a brief discussion about opening the budget hearings to the public, in the event that more than three Commissioners wish to attend the hearings.

B. Authorization for Executive Director to Execute Director to Execute Amendment to Contract for Renovation of Kitchens and Bathrooms at Emory Grove and Washington Square-

Stuart Raynor, Director of Housing Management, introduced John McIlroy, Manager of Housing Management Modernization.

Mr. Raynor stated that, per the Commission’s authorization, the Executive Director executed a contract in the amount of $466,000 – with a provision for modifications costing an additional 10% - for the renovation of the kitchens and bathrooms at Emory Grove and Washington Square.

Mr. Raynor pointed out that renovating kitchens and bathrooms in an older property in which large families have lived, once under way, often leads to the identification of work that was not identified in the original project plans. He stated that such is the case for this project. The subflooring that needed to be replaced, as well as additional work related to bathtubs and cabinets, will require more work and/or materials than identified in the scope of work determined for each unit.

Mr. Raynor stated that, as the project neared completion, the Project Manager authorized work for which the cost exceeded the contract amount plus the 10% provision for modifications. He emphatically stated the Project Manager should never have taken those actions. He further explained that the Project Manager, under the supervision of the two parties here at the table, should have been, from the very beginning of the project, entering in the project log, all work and the cost thereof as it was correctly authorized and as it was completed by the contractor.

Mr. Raynor explained that the procedure is that all change orders for modifications or additional work not designated in the contract must first be described in writing by the contractor, with price quotes per the unit price schedule in the contract, and then must be approved by the Modernization Manager before the work is authorized and entered in the log.

Mr. Raynor stated that in a project of this type, if procedure had been followed, it would have been clear early on that the contract amount was probably not going to be sufficient to complete the project - particularly on this job wherein the cost of work in the first completed units exceeded 110% of average per unit cost per the contract. Knowing that early on, staff would have been able to project a new total cost for the project and request approval of a contract amendment at that point.

Mr. Raynor then explained that, near the end of the project, a more serious error occurred – the Project Manager authorized work for which he did not have authority.

Mr. Raynor further explained that procedures which preclude errors of this type were and are in place. He noted that the Project Manager has been admonished for not following the procedures.

Mr. Raynor assured the Commission that, going forward, this subject will be a regular agenda item at group and individual staff meetings and that senior Housing Management staff will more frequently and more carefully monitor project logs so that this does not happen again.

There was a brief discussion about the time it is taking to complete the renovation.

Commissioner Bennett moved, seconded by Vice-Chair Cohen, to adopt the resolution. Affirmative votes were cast by Commissioners Thompson, Kator, Galloway, Nelson, Bennett and Cohen.

RESOLUTION: 2003-34 RE: Authorization for

Executive Director

To Execute Amendment to Contract for Renovation of Kitchens and Bathrooms at Emory Grove and Washington Square

WHEREAS, the Housing Opportunities Commission authorized the Executive Director or his designee to execute a contract with OMF Contractors in the amount of $466,000 for renovation of kitchens and bathrooms at Emory Grove and Washington Square and to approve contract modifications that do not exceed ten percent (10%) of the original contract amount in accordance with Housing Opportunities Commission Procurement Policy; and

WHEREAS, the Project Manager in violation of the Procurement Policy and without proper authority approved additional work the cost of which exceeded the amount of the approved contract and modifications thereto by $88,539; and

WHEREAS, the additional work was due to conditions which were not know prior to the start of work but were necessary to properly complete the renovations.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities

Commission that the Executive Director or his designee is hereby authorized to execute an amendment in the amount of $88,539 to contract #10-0110 for renovation of kitchens and bathrooms at Emory Grove and Washington Square.

C. Approval of FY 2004 Public Housing Agency Plans -

Doug Ryan, Housing Policy Coordinator, stated that he was presenting the proposed final version of the Public Housing Annual Plan and the Public Housing five-year plan. The plans are due to HUD no later than April 15^th. Mr. Ryan directed the Commission’s attention to revisions to the demographics of the waiting lists for the Housing Choice Voucher Program and the Public Housing Program.

Mr. Ryan stated that no major changes are being made to the plans. He pointed out that changes have been made to the demographics of persons or families on waiting lists for Public Housing and Housing Choice Voucher programs.

Mr. Ryan stated that Congress is requiring Public Housing Agencies to administer the community service requirement for certain Public Housing Residents. The effective date will be July 1, 2003. He explained that staff has identified approximately 450 residents who will be required to participate in the community service program. He then stated that the plan has been modified to identify Parkway Woods as a property with potential sale of Public Housing units. He also noted that Middlebrook is listed as a property which has potential demolition of units. He explained that the demolition of eight units will occur with the renovation of the property. Mr. Minton confirmed that final approval was received from HUD to abate those units.

Mr. Ryan stated that staff met with the Resident Advisory Board (RAB) in February to discuss the proposed Agency Plans. He directed the Commission’s attention to a letter from the RAB which will be submitted to HUD. He explained that the RAB is in support of the Plan. Additionally, members of the RAB would like the Commission to consider adding a preference for veterans in both the Housing Choice Voucher Program and the Public Housing Program.

Mr. Ryan stated that the Agency is not adding that preference to its programs. Mr. Ryan explained that the preference is not being added because the Agency desires to keep the programs as open to the income-eligible populations as possible. There was a brief discussion of a recent letter to the Commission regarding that matter.

Chair Nelson explained that the Commission adopted a preference for persons who live or work in Montgomery County. He further explained that the Commission decided not to adopt any other preferences. Mr. Ryan stated that the Housing Choice Voucher Program has the additional preference for rent burden which the Commission adopted last year. A brief discussion ensued.

Commissioner Kator inquired about a preference for persons with disabilities. Mr. Minton and Chair Nelson confirmed that disability preference was included in the 1998 legislation on federal preferences. However, Chair Nelson confirmed that the Commission did not adopt it (and several others) at that time.

Mr. Ryan reiterated that the proposed plan, if approved would be submitted to HUD during the following week. He stated that there are no significant changes to the current plan for the Agency.