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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. Plymouth Housing and Redevelopment Authority March 17, 2005 Page 2 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. Plymouth Housing and Redevelopment Authority March 17, 2005 Page 3 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 Plymouth Housing and Redevelopment Authority March 17, 2005 Page 4 440,000 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. Plymouth Housing and Redevelopment Authority March 17, 2005 Page 5 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. Plymouth Housing and Redevelopment Authority March 17, 2005 Page 6 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