County Housing Commission Meeting

I. Welcome & Introductions – Hank Atha reported that this particular commission was established November 16th of last year. The County BOS approved several things related to housing, including the creation of this committee and the establishment of additional funding for the housing trust fund. Please note, all of these meetings must comply with open meeting laws. Today’s meeting will primarily cover the financial and legal aspects of bonds and open meeting laws. The County’s bond program goes back to 1997 when the county passed a $5M bond issue, and then last year another $10M was approved for affordable housing activities. The primary goal of this commission is to keep housing affordable for families in this community through home ownership, as well as rental projects. Activities of the commission include:

a. Assisting staff develop affordable housing strategies for the future

b. Reviewing and recommending (or not) project proposals

c. Ensuring the accountability of the 2004 bond funds

d. Ensuring accountability of the general housing fund

Betty Villegas provided an orientation to the Housing Commission Member File (binder). She began with Tab C, which highlights the BOS recommendations. These include:

· Increase homeownership among populations whose income are at or below 80% of the median income by 10%

· Work with non-profits to develop affordable housing strategies; and develop community-based partnerships so as to get the “best bang for the buck”

· Forego the concept of inclusionary zoning and amending the zoning code to require specific affordable housing units be set aside for each rezoning and/or residential development approved in the County.

· Initiate an amendment of the County Comprehensive Plan to include the Affordable Housing Policy and Strategies in the County Comprehensive Land Use Plan. Note, this has been done and the plan has already included this (approved by the BOS).

· Generate resources sufficient to implement the Affordable Housing Strategies. This plan will be submitted to the BOS, but not by the May 10^th deadline as originally assigned. This will be done as soon as this commission feels comfortable in doing so. The funding mechanism will be considered a work in progress.

Betty then pointed out the content of Tab F, which provided a list of the 1997 bond projects. All of the projects were completed with the exception of two. Once all the projects are completed, there will be 332 affordable units in Pima County (This was informational only to show where the $5M went). The 1997 application and instructions have been included for review as this is what was used to determine the eligibility of projects. There is additional information in the binder that can be reviewed by you at a later time, and will be addressed in detail at a future meeting.

Tab D is a draft Executive Summary of the local consolidated housing and community development plan, which goes to HUD, and be reviewed at your leisure. This was worked on with the City; this goes before the BOS and the federal Government. At the next meeting we will provide commission a summary will be provided on what Pima County does in housing programs and this will be part of the annual plan. Sometime in the future, the plan is something this committee may want to review.

Discussion: Regarding the May 10^th deadline, referenced in Tab C. Hank stated that Because of the late start decision on the affordable housing fee schedule is delayed. Staff expects to bring information on this to the commission within the next two or three meetings.

II. Open Meeting Laws and Conflict of Interest – Megan Miller, County Attorney provided a brief overview of both topics and stated that greater detail, and FAQ’s could be obtained from the AZ Attorney General’s website at: http://www.attorney_general.state.az.us/agency_handbook/agency_handbook.html or in the AZ Agency Handbook or Pima County Boards, Commissions and Committees Coordinator’s Handbook. This is covered under A.R.S. 38-431 to 431.09. The general guidelines are as follows: Any meeting of any public body that contains a quorum of its members is considered to be a meeting and thus subject to open meeting laws. This commission has been established by the BOS and subject to this A.R.S. Official acts conducted, recommendations made or actions taken must be noticed out properly so that the public can know what’s going on, this is done to maximize public access to the governmental process. As a general rule, if in question, resolve it in favor of openness. Notice of the meeting and any action item must be posted in a public location and with the Clerk of the BOS (Fax: 622-0448). You must establish a schedule, post a notice of the meeting and the agenda (or notice as to where the agenda can be found). The public has the right to attend and listen, but not participate or disrupt. You may not discuss anything that was not put on the agenda. Things like “old business”, “new business”, and “other” are not acceptable. Additionally, email discussions are not allowed either. Minutes must be taken at Board, Commission and Committee meetings and filed with the clerk’s office. One exception to the open meeting law is what’s termed an Executive Session. This can be used for discussion and advice under certain circumstances (personnel issues, legal issues, property purchase, confidential records being reviewed). However, final action on the issues discussed must be taken in open session. Compliance is important because any action, recommendation, decision will not be considered valid if the law is violated. There can be some repercussions personally – $500 fine. Ms. Miller provided the Yavapai College example for reference, as well as an example of a wedding that was posted specifically because the guest list contained a quorum of one of the Boards.

Regarding Conflict of Interest, no public official can provide or receive goods or services or compensation for goods or services by any public body. If you or one of your family members has a substantial interest, you will need to refrain from the discussion that could either directly or indirectly influence the discussion. Again, if questionable, resolve in favor of openness. Any COI must be noted for the record.

Ms. Miller welcomes the commission and encouraged the commission to go forward. If you have any additional questions, she can be reached at 740-5761.

III. The Clerk of the Board agenda item will take place at a future meeting.

IV. Bond Counsel – Tim Pickrell provided a handout for members to share regarding the specifics on housing bond issues. This commission will be responsible for reviewing applications for the 2004 bond. The $10M can be used for housing projects as this commission sees fit and the BOS approves. The expenditure of monies on the bond implementation ordinance must fall within the legal authority to do so. Some background information included that in 1997, “…of the county…” meant funds could only be applied to County-owned type housing units. Now, the county can acquire and dispose of property. Tim went on to state that the state constitution couldn’t be violated, meaning the county cannot gift or loan its credit to an individual, association, obtain a joint owner, etc. When the county resources are put out to a 3^rd party, the County must receive something of value back and $1/year back is not acceptable. The value back can be public benefit, cash or program value. Regarding federal tax exemptions and bonds: bonds are issued at low interest rates and cannot be sold at a higher interest rate to generate profit. The bonds can only be used for the public and cannot be used in a trader business. Additionally, there are arbitrage restrictions. To avoid arbitrage issues, the best course of action is to spend the money shortly after the bonds are sold thus avoiding large “rebate” payments to the government. You may not put bond proceeds into a housing trust fund because you do not want the proceeds to resurface in another form. You always need to protect county’s tax-exempt interest. If you violate the laws, taxes, penalties, fines and/or the removal of the bond can be retroactively enforced.

V. Tom Burke, County Finance Director reiterated the importance of compliance with respect to this bond as it is watched very closely. Bonds are sold every 12-18 months in small increments over the next 10-12 years to avoid additional interest earning. The next sale takes place in May for approximately $65M. Because spending must occur within a specified timeframe, some projects will begin prior to issuing the bond, however, reimbursement resolution allows for the spending other funds and then a reimbursement will take place once the bond has been sold. Money is largely spent through reimbursement. If working on a project with another jurisdiction and they are the builder, we will pay for the building piece by piece as the building takes place; the money will not be paid in advance. No one receives money until the billing has happened so that this can be tracked with the IRS. There is some flexibility based on every day type circumstances. This particular bond of $10M will need to be expended in incremental amounts over the next 12-15 years.

VI. Comments from Supervisor Elias - Thank you for serving on this commission. On behalf of the BOS and on a subject very near and dear to me, I appreciate the brainpower you will provide. Thank you especially to Jon Miles and Frank Moreno, Commissioner representing Supervisor Elias' District 5. A lot was learned from past experience regarding the issue of spending as it applies to affordable housing. Items Mr. Elias considered vitally important include:

· While you may not have oversight of all funding sources, try to focus on the collective pot of money on a more broad scale.

· How can things be matched so that there are some meaningful results in the community? Furthermore, what’s considered meaningful? This needs to be answered so that you know what to use the money on.

· Home ownership is important, don’t just look at multifamily units and rentals. People need a variety of options. Recognize that this is a touchy subject, especially with the management of rentals. Also remember, this can become political and tax credits generate management issues.

· Remember to involve community partners and to expand the group. Look at including developers and real estate folks. Please be advocates for housing that’s affordable to all people. While subsidized projects have been the traditional way to address this issue, this always leaves out a whole portion of the population.

· The stock and bond market needs to go into the equation, because this affects how successful those projects will be.

· Bottom line: be broad-minded in looking at today’s resources; expanding partnerships, and in promoting home ownership and opportunities.

VII. Chair and Vice Chair Elections:

MOTION: Frank Thomson nominated Frank Moreno for Chair; Seconded: Jon Miles. Discussion: Does the chair give up his/her right to vote? Per Robert’s Rules of Order, this is typically the case, but the commission may adopt rules of order that vary from Roberts Rules.

The commission unanimously agreed that the Chair shall be permitted to vote on all actions before the commission. Motion unanimously carried forward with all in favor.

Original motion nominating Frank Moreno as Chair carried unanimously.

Mr. Moreno assumed the chair for remainder of the meeting.

MOTION: Jon Miles nominated David Greenberg to serve as Vice Chair; Seconded: Ken Anderson.

Discussion: What are the duties of the Vice-Chair? By and large to fill in if the Chair were absent. Additionally, discussion ensued on rules of order and policies. Staff was directed bring proposed rules of order or bylaws to the next meeting. Motion unanimously carried forward with all in favor.

VIII. Distribution of the City of Tucson Depot Plaza Application (Tab G) – The application for funds from the 1997 bond has been included for the commission’s review. To clarify, this project (MLK COT Apartment Project) would now require 2004 bond funds. There was lengthy discussion on this, for a variety of reasons, and it was ultimately decided that at the next meeting criteria, timeframe, etc. would be discussed to determine funding recommendations for the 2004 bond funds. Additionally, because time is a factor, the group would like to have the City do a presentation on the proposed project at June’s meeting. Staff will coordinate this. While several questions have been addressed via correspondence (included), this new group had several additional questions. The Commission’s purpose is to increase the number of affordable housing units, but this proposal does not do that. This project is not geared towards home ownership…this project actually reduces the number of affordable housing units available by 28, but could increase the aesthetic value of the property by adding a courtyard, gym, store, community kitchen, vending area, etc. It was also noted that the City would retain ownership of the facility. This project would require approximately 10% of the 2004 bond funds if approved.

There is currently one application from the 1997 bond that needs review (Old Pueblo Foundation for $240K). Staff will send out a copy of this proposal to each member for review prior to the next meeting. Staff will develop a proposed rating sheet for the commission to consider using to rate all project applications. At the next meeting, the group will decide on an application for use for the 2004 bond applications.

Additional discussion: Average infrastructure cost is about $18-20K per unit. The commission has requested that all proposals come forward with a staff analysis and recommendation. Staff will make that recommendation based on direction and priority from the commission on the criteria by which it wants to review proposals and rate them. Frank Moreno stated that the first agenda item for the next meeting be for the commission to identify its mission, vision, goals and objectives so that proposals can be approved or denied based on the agreed upon baseline criteria and the merits of the criteria for how projects are judged. He further requested staff to provide some suggestions for criteria. Regarding other housing funds available, the Executive Summary provides this information (member file).

IX. The standing meeting time and day will be 3:00 p.m. on the third Monday of each month, with the next meeting set for Monday, May 16^th. Meetings will take place at this location. Agendas, reminders and minutes will be sent to each member via email.

X. Call to Audience:

a. Michael McDonald, Habitat for Humanity, welcomed the opportunity of creativity and collaboration in the area of affordable housing in all aspects of the community. He will be submitting an application in partnership with four area builders for 393 homes, 87 will be Habitat homes. There are currently between 25-35K substandard homes in the community, and projects like this can get a family of four making less than $27K/year in a home (this includes educated individuals in fields like retail, education, and healthcare). He looks forward to helping to identify creative ways to fund these opportunities.

b. Terry Galligan, Old Pueblo Foundation, spoke to the pending application that was submitted approximately two months ago. He stated that it was clear that there is a need to move fast on creative ways for affordable housing or the market will go right by. There are some non-profits in town that are ready to move on this $10M and looking forward to this project.

c. Mike Bends, housing consultant for the Tucson Indian Center, spoke to the issue capacity planning. He has teamed up with Habitat for Humanity and has come up with some small but important goals for Native Americans. He looks forward to the educational process involved in understanding what projects are possible for through bond funds. He also addressed the “stereotype” of how some view the Native American population by reminding the group that outside of two casinos, the situation is different than what some might assume. For the most part, the tribal nation is unable to build houses unless special funding comes along. He is here to represent that group of Pima County residents. He looks forward to working with the commission and in understanding the commission’s goals.

XI. Adjourned. 3:00 p.m.

April 27, 2005