2003-11-18 Joint CIC HABOC MinutesMINUTES OF THE SPECIAL JOINT COMMUNITY IMPROVEMENT COMMISSION
AND HOUSING AUTHORITY BOARD OF COMMISSIONERS MEETING
TUESDAY- - NOVEMBER 18, 2003- -7:25 P.M.
Chair Johnson convened the Special Joint Meeting at 7:43 p.m.
Paden School students led the Pledge of Allegiance.
ROLL CALL - Present: Commissioners Daysog, Kerr, Gilmore,
Matarrese, Torrey and Chair Johnson - 6.
Absent: None.
AGENDA ITEM
(03 -065) Recommendation to authorize the refinancing of Parrot
Village, Eagle Village and China Clipper Plaza, to approve a Loan
Agreement between the Community Improvement Commission and
Housing Authority in the amount of $6 Million and to authorize
the Chief Executive Officer of the Housing Authority and the
Executive Director of the Community Improvement Commission to
execute all documents related to the transaction.
Commissioner Kerr stated the City should not refinance the
Housing Authority's real property with general obligation bonds.
Commissioner Daysog stated the bonds are being issued for the
economic development purposes of community and commercial
revitalization; the Housing Authority has access to other sources
of funds; although the cost associated with the Housing Authority
using other funds would be higher, bond money should be used for
economic development purposes.
Chair Johnson inquired how much outside funding would cost.
The Housing Authority Financing Manager responded the interest
rates would be much higher and there would be additional costs;
noted refinancing would save $178,000 per year.
Commissioner Daysog inquired whether the savings are accrued to
the Housing Authority, to which the Financing Manager responded
in the affirmative.
Commissioner Daysog stated the policy question is whether $6
million should be used for commercial revitalization, which
benefits all residents, or for the Housing Authority that
benefits 7,000 residents.
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The Financing Manager stated the savings could be used to build
more low- income housing.
Commissioner Gilmore stated there is a trend; interest rates are
historically low and various City departments are asking to
refinance to obtain lower interest rates; the Housing Authority
is still the "City;" the City Council should make a policy
decision regarding refinancing.
Chair Johnson stated the specific question is whether
redevelopment money should be used to refinance other loans;
loaned money cannot be used for redevelopment projects.
The Financing Manager stated the proposal would provide the City
with a cash flow for the next 30 years; refinancing would allow
the Housing Authority to get out from under Housing and Urban
Development (HUD) regulations, which have extensive guidelines
and reporting procedures.
The Executive Director stated the policy question is in which
areas does the Council choose to invest funds.
Commissioner Kerr noted the matter was presented before and
returned without additional information.
Chair Johnson stated a previous question was the impact on
financing redevelopment projects; suggested that the
redevelopment issue be placed on a future agenda, including
available funds, current plans' costs, and the amount needed for
leveraging; stated the Commissioner should have a better
understanding of whether funds are available for other uses, such
as Housing Authority refinancing.
Commissioner Gilmore inquired whether the matter is time
sensitive.
The Finance Director responded the matter relates to the bond
issuance authorized in September; the bonds have not been priced;
the City will not receive redevelopment funds if the matter is
delayed.
Chair Johnson inquired whether the bonds could be purchased
without designating whether the money would be used for the
Housing Authority.
The Finance Director responded the bond was not to exceed $50
million, which includes the $6 million Housing Authority loan;
the bonds would be sized down if the loan were not approved.
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Chair Johnson stated the bonds should go forward.
Commissioner Kerr concurred that other projects should move
forward.
Commissioner Gilmore inquired how much issuing a $6 million bond
at a later time would cost.
The Finance Director responded economies of scale would be lost;
for example, the City would have to pay Bond Counsel again.
Chair Johnson inquired whether the $6 million could be included
in the bond without being designated for the Housing Authority.
The Finance Director responded in the affirmative; stated if the
$6 million is not approved for the Housing Authority, it could be
used for redevelopment projects.
Chair Johnson inquired whether said suggestion makes sense and
whether other projects would be forthcoming.
The Finance Director responded in the affirmative.
Commissioner Matarrese stated the matter should not be delayed;
leaving $6 million undesignated until the matter is resolved is
acceptable.
Commissioner Daysog stated that he has concerns regarding issuing
bonds without making decisions about projects and costs;
generating money simply because there is the capacity to do so is
backwards; leaving $6 million open generates money looking for
something to fund, rather than requesting funds following project
selection; a decision should be made about whether or not funds
will be loaned to the Housing Authority.
Chair Johnson inquired whether $6 million would be needed for
other projects or whether said amount should not be issued.
The Development Service Director responded there will be future
redevelopment projects, such as potential West Alameda Business
Association (WABA) projects; significant additional bonding
capacity of $10 to $15 million is being held in reserve;
including $6 million does not exhaust the City's bonding
capacity; noted the Housing Authority's loan payments, which
would total $384,000 annually, could be deposited into the
commercial revitalization fund and be used as projects arise.
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Chair Johnson inquired whether $6 million should be issued if the
Housing Authority loan is not funded and whether $6 million could
be used.
The Development Services Director responded the bond covers
priority projects, which are currently well defined; however, the
$6 million could be used for additional projects, such as
upcoming Webster Street projects that are not well defined.
The Executive Director stated $44 million would address all
identified projects.
Commissioner Gilmore inquired the cost involved with issuing $6
million at a later time.
The Finance Director responded underwriting, bond counsel,
printing and rating agency costs; issuing $6 million at a
separate time would cost approximately $200,000 to $300,000.
Commissioner Kerr inquired whether cost is a function of bond
size.
The Finance Director responded bond counsel and rating agencies
are set costs; underwriting and insurance are a function of bond
size.
Commissioner Kerr inquired how much less issuing the bonds would
cost if the $6 million were not included.
The Finance Director responded there would be a small savings;
however, issuing $6 million later would cost far more than the
savings.
Commissioner Matarrese stated that having $6 million, which could
be used for future, un- solidified projects on Webster Street, is
an acceptable risk; the economies of scale and interest rates are
compelling enough to issue the entire bond amount now in the
event the Housing Authority refinancing is approved in the
future; the parking structure and theatre projects should not be
delayed.
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COMMUNITY IMPROVEMENT COMMISSION ACTION
Commissioner Matarrese moved approval of issuing the bonds in the
full amount [$50 million], holding $6 million for a future policy
decision about whether to use funds for other redevelopment
projects versus loaning funds to the Housing Authority for
refinancing.
Commissioner Gilmore seconded the motion, which carried by the
following vote: Ayes: Commissioners Gilmore, Matarrese and Chair
Johnson - 3. Noes: Commissioners Daysog and Kerr - 2.
[Commissioner Torrey abstained, as he is a member of the Housing
Authority Board of Commissioners, not the Community Improvement
Commission.]
ORAL COMMUNICATIONS
None.
COMMISSIONER COMMUNICATIONS
Commissioner Torrey wished everyone a Happy Thanksgiving.
ADJOURNMENT
There being no further business, Chair Johnson adjourned the
Special Joint Meeting at 8:07 p.m.
Respectfully Submitted,
Lara Weisiger
Secretary, Community Improvement
Commission
The agenda for this meeting was posted in accordance with the
Brown Act.
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Housing Authority Board of Commissioners
November 18, 2003