HOUSING OPPORTUNITIES
COMMISSION OF
10400 Detrick Avenue
(240) 773-9025
M I N U T E S
03 - 12
A regular meeting of the Housing Opportunities
Commission of Montgomery County was conducted on
Present
Richard Y. Nelson, Jr.,
Chair
Y. Monroe Galloway, Chair
Pro Tem
Ralph D. Bennett, Jr.
LaKeyia L. Thompson
Roberto Piñero
Absent
Michael J. Kator
Also
Attending
Scott Minton, Executive Director Ken
Tecler
Annie Alston Bill
Murphy
Lillian
Gail Willison Susan
Yancy
Les Kaplan William Anderson
Andrew Oxendine Dan
Sachs
Scott Ewart
Dana Miller, Special Assistant to the Commission
Guests
Carole Walker, Gables Residential
Mark Viani, Linowes & Blocher LLP
Marvin Weinman,
Lauren Jean Fielder
Chair
Nelson called the meeting to order at
Chair
Nelson then welcomed Commissioner Piñero to the Commission. He stated that the Commission appreciates the
contributions he will make to the Commission.
The
Chair then called for consideration of the Consent Calendar. Commissioner Bennett moved, seconded by Chair
Pro Tem Galloway, to approve the consent items.
Affirmative votes were cast by
I. CONSENT
CALENDAR
A. Approval
of Minutes of
B. Approval of Minutes of
C. Approval of Changes to
RESOLUTION: 03-97 RE:
Approval of
Changes to
Declarations of
Covenants
WHEREAS, the Housing Opportunities Commission of Montgomery
County, is the general partner Strathmore Court Associates Limited Partnership
which is the owner of certain units in a condominium know as “Strathmore Court at White Flint” (the
“Condominium”); and
WHEREAS, the Commission owns the remaining units in the
Condominium; and
WHEREAS, the Condominium was
constructed pursuant to certain agreements known as the Adequate Public
Facilities Ordinance Agreement, Declaration of Covenants, and Amended and
Restated Residential Usage Agreement (the “Documents”), among the Montgomery
County Planning Board, the Commission and the adjacent property owner to assure
continuity of residential development and maintenance of certain commonly used
facilities; and
WHEREAS, the property adjacent to the Condominium, known as
Lot 4, which is subject to the Documents, is expected to be acquired by the U.S.
government for its operation of the Nuclear Regulatory Commission; and
WHEREAS, the
WHEREAS, the
WHEREAS, the Montgomery County Planning Board has agreed to
the modifications of the Documents;
NOW,
THEREFORE, BE IT HEREBY RESOLVED, by the Housing Opportunities Commission, that
the First Amendment to the Adequate Public Facilities Ordinance Agreement,
First Amendment to Declaration of Covenants, and First Amendment to Amended and
Restated and Residential Usage Agreement are accepted, and the Executive
Director is hereby authorized to execute the foregoing documents on behalf of
the Commission as owner of certain units in the Condominium and as general
partner of Strathmore Court Associates Limited Partnership, the owner of the
remaining Condominium units.
D. Adoption of an Inducement Resolution
for
RESOLUTION: 03-98 RE:
Adoption of an Inducement
Resolution
for
Apartments
WHEREAS, one of the public purposes of the Housing
Opportunities Commission of Montgomery County, ("the Commission") is
to promote the construction of and acquisition of multifamily rental housing
developments in Montgomery County to be occupied by eligible persons and
families; and
WHEREAS, the Commission is authorized to issue tax‑exempt
bonds to provide the acquisition, construction and permanent financing for such
developments; and
WHEREAS, the Commission has been asked to consider the
issuance of tax-exempt bonds to finance the acquisition and rehabilitation loan
for a multifamily rental housing development,
WHEREAS, the Commission sees this financing arrangement as an
opportunity to further its goals in meeting said public purposes.
NOW,
THEREFORE, BE IT RESOLVED by the
Housing Opportunities
Commission
of
BE IT FURTHER
RESOLVED that it is the intention of
the Commission to issue tax‑exempt bonds in the maximum principal amount
of $3,000,000 to provide financing for the acquisition, rehabilitation,
improvement and permanent financing of the development project. The foregoing represents an expression of
intent in order to satisfy the provision of Section 1.150-2 of the United
States Income Tax Regulations, and is not a commitment by the Commission to
issue said bonds. Issuance of said bonds
shall 1) be at the discretion of the Commission and 2) shall be subject to the
final satisfactory underwriting and approval of all documents, provisions,
covenants, and all other provisions as may be required by the Commission and 3)
shall be subject to final acceptance of same by the Owner of the Project.
E. Adoption of a
Resolution Consenting to the
RESOLUTION: 03-99 RE: Authorization of
Partnership
Interest in
Woodleaf
Apartments
Ownership
Entity
Due to its length, the aforementioned resolution has
not been printed within the text of the minutes. A copy of the Resolution is on file in the
Office of the Commission.
F. Approval of Revision
to Legacy (HOPE) Program- The following Resolution was adopted:
RESOLUTION: 03-100 RE: Approval of Revision to
Legacy
(HOPE) Program
G. Authorization to Form
a Development Corporation for
RESOLUTION:
03-101
RE: Authorization to Form a
Development
Corporation
for
Kiss
and Ride Site
WHEREAS, In June, 2001, WMATA
awarded Bozzuto Development Company and HOC, as joint venture partners, the
residential development rights to the WMATA Kiss and Ride site located at the
southeast corner of Georgia Avenue and Reedie Drive in Wheaton Maryland; and
WHEREAS, subsequently, HOC and Bozzuto
Development Company entered into a Development Agreement in which Bozzuto
Development Company assigned its 50% ownership interest in the Wheaton Metro
Kiss and Ride site to HOC; and
WHEREAS, staff has been negotiating
the terms of the Purchase and Sale Agreement with WMATA for the Wheaton Metro
Kiss and Ride site; and
WHEREAS, to reduce its financial
exposure and minimize issues with its County insurers relating to
indemnification required in the Purchase Agreement, HOC wishes to set up a
development corporation as the nominal owner and contracting party for the
Wheaton Metro Kiss and Ride site.
NOW THEREFORE, BE IT
RESOLVED by
the Housing Opportunities Commission of Montgomery County that the Executive
Director is authorized to sign the Articles of Incorporation to form a
development corporation for the Wheaton Metro Kiss and Ride site.
H. Authorization to Form
a Limited Liability Company to Hold a Partnership Interest in MHLP I - The following Resolution
was adopted:
RESOLUTION: 03-102 RE: Authorization to Form a
Limited
Liability
Company
to Hold a
Partnership
Interest in
MHLP
I
WHEREAS, the Housing Opportunities Commission, general partner
in Montgomery Homes L.P. I (the “Partnership”), presently owns 50.5% of the
interests in the Partnership, by reason of the assignment to HOC on December
31, 2002 of 49.5% of the partnership interests from one of the limited
partners; and
WHEREAS, the remaining limited partner, Fannie Mae, holds the
other 49.5% limited partnership interest; and
WHEREAS, the transfer by Fannie Mae of its partnership
interest to HOC would effect a technical termination of the Partnership,
resulting in the merger of all ownership interests in the Partnership
properties in HOC; and
WHEREAS, Sec. 42(d)(2)(B)(ii) of the Internal Revenue Code
denies tax-credit benefits as to property which has been placed in service
within the ten years preceding transfer to the entity seeking to use the
credits (the “ten-year rule”); and
WHEREAS, the Commission, to retain its freedom to sell the
Partnership property to a successor tax credit partnership, seeks to forestall
application of the ten-year rule; and
WHEREAS, formation of a limited liability company and the
transfer to that entity of a percentage of the interests in the Partnership now
owned by HOC would keep the Partnership in existence and thereby avoid
application of the ten-year rule.
NOW,
THEREFORE, BE IT RESOLVED by the
Housing Opportunities Commission of
1.
There is hereby
created a limited liability company to be known as Montgomery Homes One LLC, or
such other name as the Executive Director shall deem appropriate (in either
case the “LLC”).
2.
The Executive
Director is authorized (a) to execute the articles of organization for the LLC;
(b) to file same with the Maryland Department of Assessments and Taxation; and
(c) to execute such other documents in connection therewith as he and counsel
shall deem appropriate.
3.
Upon the filing
of the documents referred to in (2) above, the Commission shall convey to the
LLC a three-tenths of one percent (3/10 of 1%) interest in Montgomery Homes
Limited Partnership I. The Executive
Director is authorized to execute any and all documents necessary or desirable
to effect such transfer.
I. Authorization to
Extend the Maturity Date for the DHCD RHPP Loan for
RESOLUTION: 03-103 RE: Authorization to Extend
the
Maturity Date for the
DHCD RHPP Loan for
WHEREAS, in
September 1998, the Department of Housing and Community Development of the
State of Maryland (DHCD) provided a $1 million Rental Housing Production
Program (RHPP) loan to HOC for the benefit of Kensington Park; and
WHEREAS, the
RHPP loan expires on December 1, 2003, but HOC has the option to request an
extension of the maturity date for an additional five-year term; and
WHEREAS, the
Montgomery County Department of Housing and Community Affairs (DHCA) provided a
similar $800,000 loan to HOC for the benefit of Kensington Park which expires
in April 2007; and
WHEREAS, the
loans provide rental subsidy to 20 eligible units or 40 eligible residents
whose incomes are at or below 50% of the Washington, DC-MD-VA Area Median
Income; and
WHEREAS, by
extending the maturity date of the loan, the low-income residents will continue
to receive rental housing subsidy for an additional five years.
NOW,
THEREFORE, BE IT RESOLVED, that the
Housing Opportunities Commission authorizes staff to take all steps necessary
to extend the maturity date of the DHCD Rental Housing Production Program
(RHPP) loan for Kensington Park for an additional five-year term to December 1,
2008 and authorizes the Executive Director to sign all documents related to the
extension of the maturity date.
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 he received a letter from the County Council today which
requests HOC to participate in the FY04 Savings Plan and Position Procurement
Suspension. He explained that HOC’s
target reduction in County funding is $86,950.
He noted that the Agency must respond by
2)
The Public
Housing Elderly Waiting List will remain open until Friday, October 3rd. He stated there have been 410
applicants. Mr. Minton noted that 270 of
the applications were received over the internet. He noted that the number of applications is
similar to last year’s response, however the number of on-line applications has
doubled.
3)
Mr. Minton
informed the Commission that the Department of Housing and Community
Development (DHCD) had provided State Partnership Rental Housing funds for the
Kenneth
Tecler, General Counsel, explained that general conditions have been added to
the contract by DHCD. In response to a
question by Chair Nelson, Mr. Minton explained that the overhead fee has been
increased by the Contractor. The change
reflects an increase from 2.5% to 4%. In
response to a question from Commissioner Bennett, Mr. Minton confirmed that the
increase is a result of the processes involved with the DHCD funds.
Peter
Engel, Director of Real Estate, stated that the DCHD will provide approximately
$3 million for the project. He stated
the funds are essentially a grant. He
further explained that the contractor’s increase is reflective of additional
administrative work that will be involved for the contractor in order to meet
the MBE requirements. He stated that
increases such as this are not uncommon.
He went on to inform the Commission that the total contract amount, at
present, is still below the maximum amount previously discussed with the Commission.
In
response to a question by Commissioner Bennett, Mr. Engel stated that the
construction start date will be as soon as the contract is signed.
Chair
Nelson recognized a motion by Chair Pro Tem Galloway seconded by Commissioner
Thompson, to authorize staff to modify the
Affirmative
votes were cast by Commissioners Piñero, Cohen, Nelson, Bennett, Thompson and
Galloway. Commissioner Kator was
necessarily absent and did not participate in the vote.
4)
An HIF review of
In
response to a question from Commissioner Bennett, Mr. Minton explained that an
HIF commitment was given by DHCA in the Spring, however, a second review was
requested.
Chair
Nelson pointed out that Elizabeth Davison, Director of DHCA, had expressed
concerns about delays in the project.
Mr. Minton explained that it was necessary to obtain new bids for the
project which delayed the project for four months. Chair Nelson stated that he is still
expecting a favorable response from DHCA.
Commissioner
Bennett asked whether it had been explained that although the re-bidding
process resulted in a delay, it also resulted in considerable savings.
5)
Mr. Minton stated
that the cost of the repairs to Waverly House may be added to the bond that CDA
is issuing against Public Housing Capital Funds. The Mortgage Finance Division is working to
provide the information to CDA. He
stated that adding the costs into the bond would prevent the Agency from
re-directing $700,000 to $1 million in existing funds from other projects.
6) Mr. Minton thanked Commissioner Cohen for
conducting two personal financial
management
workshops for staff. He stated that
approximately 50 staff participated and staff is eagerly awaiting upcoming
sessions.
7) Staff testified at a hearing on the Annual
Growth Plan for 2003. Mr. Minton stated
that
staff testified against the proposed 1% growth
cap. He stated that staff testified on
impact fees. Staff took the position that although there is a need for
infrastructure rebuilding, the current flat fee is regressive on affordable
housing. Also, the structure of the
impact fees exempts MPDUs but does not exempt other forms of affordable
housing.
Mr. Minton explained that although the impact fees
are structured at set rates by unit type (single family, town house, garden
apartments, hi-rise, and elderly). In
addition, the transportation tax is set according to proximity to a Metro
station.
Mr. Minton informed the Commission that staff recommended
a progressive tax structure. He explained that the County Council’s attorney
informed staff that the fees can be progressive based on unit size. However, making it progressive based on
price, would require State approval.
Mr. Minton stated that staff will pay close
attention to the issue. He stated that
interest groups are supporting the growth cap.
The cap would limit production by approximately half of this year’s production. He noted that it is also a cap on jobs as
well as houses. Mr. Minton stated that
the Planning Board is supporting the cap.
8) Mr. Minton reminded the
Commission of the Montgomery County Housing Fair being
held on Saturday, October 4th. He stated that Commissioner Piñero would be
speaking at
the event. HOC is a sponsor of the Fair and will operate
an information booth at the event.
9) On
Wednesday, October 8th HOC
will hold the Housing Forum. State
Senator Sharon
Grosfeld, who serves on the Governor’s Commission on
Housing, will speak to the audience about the Commission. Additionally, Elizabeth Davison, Director of
DHCA, will speak about the
10) Housing
Choice Voucher payment standard increases went into effect today. Payment
standards
increased by 5.5%.
B. COMMISSIONER EXCHANGE
Chair
Pro Tem Galloway commended staff for the great job that was done during
Hurricane Isabel. She stated that the
Resident Services staff worked very hard to ensure that the elderly residents
were attended to. Commissioners Nelson
and Bennett echoed her sentiments.
C.
COMMUNITY FORUM –
Ms.
Lauren J. Fielder of
Ms.
Fielder stated that she and her seven-year-old son have been residents of the
County for three years. She stated that
she has been paying approximately 80 – 90% of her income for rent. She informed the Commission that she has
completed her pre-requisite college course work to become a registered
nurse. She is ready to begin the
clinical phase of the program which requires working in a hospital or clinic
for 30 hours per week without pay. To
complete this phase, which will take approximately a year and a half, Ms.
Fielder will need affordable housing.
Ms.
Fielder stated that she attended last month’s Commission meeting during which
time a landlord spoke about his experiences with the staff of the Housing
Choice Voucher Program at HOC. She
stated that she wanted to tell the Commission about her experience with HOC.
In
2000, Ms. Fielder contacted HOC for information on affordable housing. She received information on housing
programs. She stated that her follow-up
calls often went unanswered. She stated that
since that time, customer service has improved and her calls no longer go
unanswered. She noted the efficiency of
the Agency and staff under the Executive Director, Scott Minton. However, she noted that frequently the lists
contain inaccurate information and that staff at the properties that maintain
separate waiting lists are not properly trained on the programs or the
procedures involved. Particularly, she
noted her encounters with staff at The Metropolitan.
Ms.
Fielder distributed a copy of the list of HOC owned and managed properties
which she obtained from the website. She
stated that she called each of the properties on the list and made notes of the
responses she received when calling to inquire about being placed on the
waiting lists. She noted that at Pooks
Hill, she was told that an individual must a pay an application fee to be added
to the waiting list. At
Ms.
Fielder stated that she applied for the Housing Choice Voucher Program in June
of 2001. She re-applied this past
August. She stated that the Public
Housing waiting list has not opened during her three year search. Ms. Fielder stated that after reviewing the
list, the minimum incomes are not conducive to someone in her situation with a
part-time job.
Chair
Nelson thanked Ms. Fielder for her comments and insight. He stated that her experience is reflective
of the extreme need for affordable housing in the County. He pointed out that it is also reflective of
the varied programs that HOC administers.
Chair Nelson informed Ms. Fielder that staff will review the responses
that she received during her calls to the properties. He offered to speak with her and to have
staff contact her once they have reviewed the list.
Ms.
Fielder inquired about the wait list policy and the necessity of having
applicants apply for a new wait list.
She questioned the fairness of the process to those who re-apply each
year and should have “seniority”. Chair
Nelson explained that the Commission adopted the policy in recent years, but it
is not a HUD requirement. He further
explained that, before the policy change, the list contained names that were on
the list for several years and, in some instances, contained the names of
people who were no longer eligible for the program. The change was made to ensure that a current
list of active applicants is available to utilize. He stated that the system was selected as the
most manageable and fairest solution.
In
response to a question by Ms. Fielder, Chair Nelson explained that 75% of new
Housing Choice Vouchers must be distributed to families that earn less than 30%
of the Area Median Income. He stated
that income eligibility is determined during the lease-up process.
Commissioner
Bennett thanked Ms. Fielder for providing the Commission with a view of the
other side of the process. He stated
that it is very instructive to be alerted to what the Agency is not
accomplishing rather than continue to celebrate that which is. Vice Chair Cohen echoed Commissioner Bennett’s
sentiments. He stated that the
Commission understands her frustration.
There
was a lengthy discussion about information that Ms. Fielder received when
calling certain properties. Vice Chair
Cohen stated that her comments have made the Commission aware of the need to
better train contract managers and on-staff managers.
With
regard to full-time students residing at
III.
COMMITTEE REPORTS
Budget, Finance and Audit
Committee
–
Vice-Chair
Cohen reported that the Committee was unable to meet because of the
hurricane. He asked Gail Willison,
Budget Officer, to provide the report on the 4th Quarter FY03 Budget
to Actual Statements.
Ms. Willison stated that the fourth quarter loss for the General Fund is $1,045,591.00. She stated that this loss is $556,000 less than budgeted due to savings in personnel, operating and maintenance expens