HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 03-17-2005MINUTES
PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY
March 17, 2005
PRESENT: Chair Susan Henderson, Commissioners Steve Ludovissie, Jenny Flansburg, and
Jim Kovach
ABSENT: Commissioner Tim Bildsoe
STAFF PRESENT: Executive Director Anne Hurlburt, Housing Program Manager Jim Barnes,
HRA Specialist Tracy Jones, Housing Specialist Paula Dorn, Senior Planner Marie Darling and
Office Support Representative Barb Peterson.
OTHERS PRESENT: Bill Wolters from Constructive Ideas, Rich Szydlowski and Erik Ennen
from the Center for Energy and Environment.
1. CALL TO ORDER
Chair Henderson called the Plymouth Housing and Redevelopment Authority meeting to order
March 17, 2005 at 7:00 PM.
Item 4A, Regulatory Policies and Housing Affordability, was tabled until April 21, 2005.
2. CONSENT AGENDA
A. Approval of the February 17, 2005 HRA Meeting Minutes.
B. Plymouth Towne Square — Accept monthly housing reports.
C. Update on Management Services for Senior Apartment Buildings.
MOTION by Commissioner Ludovissie, seconded by Commissioner Flansburg, approving the
consent agenda.
Vote. 4 Ayes. Motion approved.
3. NEW BUSINESS
A. Family Self -Sufficiency Program. Give notice not to renew contract with Employment
Action Center effective June 30, 2005.
Housing Specialist Dorn stated that the Department of Housing and Urban Development (HUD)
notified Plymouth HRA that they were not selected to receive funding for the FY 2004 Housing
Choice Voucher Family Self Sufficiency Program. She explained the criteria used by HUD to
make this determination and feels that Plymouth will not receive any funding in the near future.
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March 17, 2005
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Ms. Dorn said our agreement with St. Louis Park Housing Authority and EAC runs from July 1,
2004 through June 30, 2005 and stated we have funds which will cover expenses through that
date. Staff is requesting the HRA to terminate the agreement as of June 30, 2005.
MOTION by Commissioner Flansburg, seconded by Commissioner Kovach, to terminate the
agreement between the Plymouth HRA, EAC and St. Louis Park Housing Authority effective
June 30, 2005, which is the end of the contract year.
Vote. 4 Ayes. Motion approved.
B. Plymouth Towne Square. Center for Energy and Environment Presentation proposal to
address roof issues.
Housing Manager Barnes presented background information regarding the problems with ice
dams that have occurred at Plymouth Towne Square. He said many solutions have been tried
over the past years and although progress has been made, there is still some leaking caused by
ice dams. Housing Manager Barnes said he has been working with the Center for Energy and
Environment to review and inspect the building and provide a recommendation for solving the
ice damming.
Housing Manger Barnes introduced Mr. Ennen and Mr. Szydlowski, representing the Center for
Energy and Environment.
Mr. Szydlowski said their company is a private non-profit organization specializing in research
of buildings to improve the environment. A booklet was distributed that includes samples of ice
dam problems and points out what the solution strategy would be. Mr. Szydlowski said they
would inspect the building, identify the problems, specify a scope of work and then conduct a
follow up inspection to make sure the work is implemented correctly.
Mr. Szydlowski explained ice dams and said that by the time the damage is seen in the
apartments a lot of moisture has accumulated in the attic and there is the possibility that
structural damage has occurred. He said the use of heat tape will help the situation, but does not
address the core problem, which is heat flowing up through air bypasses. Air bypasses are holes
in the ceiling which allow air to move through them into the attic space.
Mr. Szydlowski explained the use of thermal imaging following the sealing of bypass areas by a
contractor. He said that air flows through fiberglass insulation so the use of insulation alone
does not correct the problem. When the sealing has been completed by a contractor the Center
for Energy and Environment will perform a post inspection, by which they pressurize some of
the apartments, put a fan in the door, and use a camera in the attic to see where the air is still
entering the attic from the outside or the apartments. If there is still air movement, the contractor
will need to correct the situation prior to payment. Mr. Szydlowski said their role would be to do
the initial inspection, specification and post inspection. They do not do the actual corrective
work.
Commissioner Flansburg asked if you can have a building designed like Plymouth Towne
Square with various peaks and not have a water problem or does it have to do with the structure
of the building. Mr. Szydlowski said some of the issue has to do with the design of the building.
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March 17, 2005
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Commissioner Ludovissie asked what the cost of a preliminary report would be and inquired if
the $5,000 figure was a total amount for their services. Mr. Szydlowski stated that the $5000
was for a work plan that was put together over a year ago that used a different work scope. He
said the cost would depend on whether they provide only inspection services or a total solution.
Commissioner Ludovissie said if there were major design issues it would be nice to know that
before spending a lot of money on reports and finding out the problem can't be corrected without
spending a huge dollar amount. Mr. Szydlowski suggested doing a step process. He said the
initial inspection would be approximately the work scope of $5,000.
Discussion took place regarding the use of contractor services. The Center for Energy and
Environment could provide contractor services or the HRA could hire a contractor. Mr.
Szydlowski recommends if contracted out a post inspection needs to be done to verify the work
of the contractor. Commissioner Flansburg asked if their company prefers to work with certain
contractors. He said they would prefer to have the contractor under their direction so they would
be in control of the work performed. The process for the inspection was detailed and Mr.
Szydlowski said the initial inspection would take 3-4 days but depends on getting access to the
apartments.
Commissioner Ludovissie asked about the level of the report. Mr. Szydlowski said the report
would be similar to the handout. Commissioner Ludovissie asked how many people would
participate in the inspection process. Mr. Szydlowski replied that there would be two inspectors.
Commissioner Flansburg asked about the sense of urgency at this time. Housing Manager
Barnes said it is hard to compare this year to prior years because the winter has been so mild.
The timing of the inspection was discussed because it should be done during colder weather.
Chair Henderson said her concern is the damage that has already been done. Housing Manager
Barnes said he feels that any damage already occurred would be minimal.
Commissioner Kovach asked about the building's warranty period. Director Hurlburt replied
that period has past.
Commissioner Flansburg feels if the inspection is done soon then planning for the correction of
the problem can take place.
MOTION by Commissioner Flansburg, seconded by Commissioner Ludovissie, recommending
completion of the building evaluation as presented by the Center for Energy and Environment,
provide staff with results and then decide on a corrective action.
Vote: 4 Ayes. Motion approved.
C. New Senior Project. Update on financial pro forma.
Housing Manager Barnes provided an update on the projected cost per unit for the new senior
building. He said the most current information provided by Springsted, using the per unit
construction cost of $100,000 per unit, is on the handout which the commissioners have before
them. Housing Manager Barnes said Springsted has been extremely conservative in making sure
there are a number of safeguards in place before going forward. These include an additional
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March 17, 2005
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440,000 to the contingency, using 113% debt coverage rather than the required 110% debt
coverage.
Housing Manager Barnes said that Bill Wolters has revised the original construction cost
estimate based on the redesign of the building. The per unit cost was reduced by $1,000 per unit.
These changes occurred as a result of the market study which recommended higher rents, and
discussions between the architect, owner's representative and staff.
Housing Manager Barnes compared the two financing options which Springsted suggested. He
said that using Option 1 would have the HRA issuing $11,735,000 in bonds and contributing
480,000 up front. However, the caveat to this option is that the HRA would be required to
make an annual contribution to the project for 30 years ranging from $70,000 - $95,000. This is
similar to Plymouth Towne Square.
Option 2 has the HRA issuing $10,675,000 in bonds and contributing up to $1,415,000 up -front.
This option does not require any annual contribution from the HRA. Option 2 indicates an
annual cash flow after expenses ranging from $33,000 to $116,000 which are funds that could go
back into the reserve account.
Housing Manager Barnes updated the Board on the financial resources which are available to use
for this project.
Housing Manager Barnes cautioned the Board that the pro forma is really the best estimate at this
point in time. He said there are many variables which could occur such as construction costs
coming in higher or lower, or the bond interest rate could be higher or lower than projected. He
said that if Option 2 is used, the HRA will be pledging the $1.4 million to cover any gap,
however, the HRA is not required to use the entire amount if not needed.
Housing Manager Barnes said one item which would save dollars would be to use a different
heating system other than the Magic Pac system. This would be a savings of about $10,000 per
unit which would save the HRA $960,000 up -front. He suggested this system could be looked at
as an alternative.
Commissioner Ludovissie asked about maintenance costs for the different types of heating
systems. Mr. Wolters said maintenance will be needed for any type system in the future.
Commissioner Flansburg asked about the quality of other heating systems. Mr. Wolters
explained the different types. Housing Manager Barnes explained how the cost of the systems
would differ. Discussion took place regarding the different types and the cost involved with
each.
Commissioner Ludovissie feels that Option 1 would be the best where you preserve some
reserves and also set money aside to deal with the annual payment.
Director Hurlburt said we are trying to make the project work without an ongoing tax levy like
we have at Plymouth Towne Square. She feels a tax levy may not be acceptable to the City
Council.
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March 17, 2005
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Chair Henderson asked about an option somewhere between Option 1 and Option 2 such as
getting a bond for $11,735,000 and contributing more up -front dollars. Housing Manager Barnes
said that the size of the bond is based on revenues the building would generate so if we do not
want an annual subsidy, we would have to issue $10,675,000 because that is all that the projected
revenues will support.
Director Hurlburt said we could reduce the amount of reserves we pledge by removing the cost
for the Magic Pac heat system from the units.
Commissioner Ludovissie said he is concerned about the type of product used and doesn't want
to run into vacancy problems because we undermine the product.
Chair Henderson asked how we can change Option 1 so we do not continue to contribute
annually.
Director Hurlburt said the Magic Pac system can be eliminated up -front and another option can
be created using a combination of Option 1 and 2 which would not require pledging an annual
tax levy and would keep more of the reserves for planning purposes.
Housing Manager Barnes said we would issue approximately $10,675,000 and reduce the equity
contribution proportionately to the reduction in the construction costs by eliminating the Magic
Pac system.
Housing Manager Barnes said staff is looking for direction from the Board. He said Springsted
will be directed to run the bond issue using the numbers after deleting the Magic Pac system. He
said the Board can decide later if they want to use some of the reserves to cover additional
amenities.
Chair Henderson stated the Board does not want to make an annual contribution and they do not
want to pledge all the money the HRA has right now.
Discussion occurred regarding how funds would be expended for the project. Director Hurlburt
said that TIHAP funds are available only for multi -unit buildings.
Commissioner Flansburg asked if the tax increment money would be depleted by using the full
TIHAP amount. Housing Manager Barnes stated that it would. Housing Manager Barnes said
that Springsted built the pro forma knowing that these amounts are phasing out over time but
they have maintained a 113% debt coverage throughout every year we are paying.
Commissioner Flansburg asked if she understands correctly that a combination of Option 1 and
Option 2 will be used. Director Hurlburt said there would not be an annual contribution and the
amount of reserves used would be reduced by taking the equivalent of the Magic Pac systems out
of the budget at this point.
Director Hurlburt said the City Council will pledge the general obligation to the bonds on March
29th
and they will have two resolutions before them. One will be for the smaller building and
one for the larger building, which the HRA would prefer.
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March 17, 2005
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Discussion took place regarding the City Council meeting on March 29th
Housing Manager Barnes suggested setting a special meeting following the Council Meeting. A
date was set for March 31 st
Housing Manager Barnes said the selling of the bonds will take place April 12th
MOTION by Chair Henderson, seconded by Commissioner Kovach, directing staff to remove
the Magic Pac systems from the pro forma and minimize the up -front investment by the HRA.
Vote: 4 Ayes. Motion approved.
MOTION by Commissioner Flansburg, seconded by Commissioner Ludovissie to set March 31St
at 7:00 p.m. and April 12th at 6:00 p.m. as special meetings for the HRA.
Vote: 4 Ayes. Motion approved.
D. New Senior Project. Building name.
This item was tabled to a later date.
E. Election of Officers
This item was tabled to a later date.
4. OLD BUSINESS
A. Regulatory Policies and Housing Affordability. A study of the impact of regulatory
policies and their effects on housing affordability.
This item was tabled until the April meeting.
Meeting adjourned at 8:45 PM.
HRA/Minutes/3-17-05