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HomeMy WebLinkAbout2010/10/05-Minutes-Fort Worth Housing Finance Corporation (FWHFC)CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, OCTOBER 5, 2010 Present: President Kathleen Hicks (Arrived at 12:15 p.m.) Vice President Danny Scarth Secretary Frank Moss Director Salvador Espino Director W. B. "Zim" Zimmerman Director Jungus Jordan Director Joel Burns Absent: Director Mike Moncrief Director Carter Burdette City staff: Tom Higgins, Assistant City Manager Vicki Ganske, Senior Assistant City Attorney Ron Gonzales, Assistant City Secretary Jay Chapa, Assistant General Manager Other staff: Cynthia Garcia, Assistant Director, Housing & Economic Development Department Robert Sturns, Economic Development Manager, Housing & Economic Development Dept. Coy Gray, Senior Administrative Services Manager, Housing & Economic Development Dept. LeAnn Guzman, Assistant City Attorney Call to Order (Agenda Item 1) With a quorum present, Vice President Scarth called the meeting to order for the Board of Directors of the Fort Worth Housing Finance Corporation (Corporation) at 12:11 p.m. on Tuesday, October 5, 2010, in the Pre - Council Chamber of the Fort Worth Municipal Building, 1000 Throckmorton Street, Fort Worth, Texas, with President Hicks temporarily absent and Directors Moncrief and Burdette absent . Approval of Minutes of the September 14, 2010 Meetinz (Agenda Item 2) Vice President Scarth opened the floor for a motion on the approk'al of the minutes of the Tuesday, June 8, 2010, meeting. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, OCTOBER 5, 2010 PAGE 2 Approval of Minutes of the September 14, 2010 Meeting (cont'd) (Agenda Item 2) MOTION: Upon a motion made by Director Espino and seconded by Director Moss, the Board of Directors voted six (6) "ayes" and zero (0) "nays ", with President Hicks temporarily absent and Directors Moncrief and Burdette absent, to approve the Tuesday, June 8, 2010, minutes of the Corporation as presented. The motion carried. Written Reports: Fort Worth Housing Finance Corporation Financial Report through Au2ust 31, 2010 (Agenda Item 3 -A) Vice President Scarth referenced the Financial Report through August 31, 2010, and opened the floor for discussion on the report. There was no discussion on this agenda item. The written report was provided to the Board as a matter of information. There was no formal action taken on the report. Executive Session (Agenda Item 4) Vice President Scarth stated that he had been advised that an Executive Session was not necessary to discuss the following items: A. Seek the advice of its attorneys concerning the following items that are exempt from public disclosure under Article X, Section 9, of the Texas State Bar Rules, as authorized by Section 551.071 of the Texas Government Code: (i) legal issues concerning any current agenda item; B. Discuss the purchase, sale, lease or value of real property, as authorized by Section 551.072 of the Texas Government Code. Deliberation in an open meeting would have a detrimental effect on the position of the Corporation in negotiations with a third party; and C. Discuss or deliberate negotiations relating to any economic development negotiations, as authorized by Section 551.087 of the Texas Government Code. This agenda item was passed over. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, OCTOBER 5, 2010 PAGE 3 Adopt Resolution Authorizing the Use of $1,102,462.44 from the Non - Federal Portion of the Fort Worth Housing Trust Fund to Reimburse the U.S. Department of Housing and Urban Development for Monitoring Findings on the Mercado Project (Agenda Item 5) Ms. Jay Chapa, Assistant General Manager, addressed the Corporation regarding the proposed resolution. Mr. Chapa advised that the two items for consideration by the Corporation today were "housekeeping" items with which the Corporation was already familiar. Mr. Chapa summarized the issues surrounding the reimbursement of the Section 108 payments contained on the first slide of his PowerPoint presentation as outlined below: • In 1999 United States Department of Housing and Urban Development (HUD) approved a Section 108 Loan to the City for $5 million. • $3.1 million was used to construct the Mercado building. • In 2008 HUD reviewed the Mercado project and found the City had failed to meet the Job Creation National Objective. • HUD gave the City 24 months to meet the Job Creation National Objective or repay Community Development Block Grant (CDBG) funds used to pay debt service for the Mercado building. • To date, the 109 new jobs have not been created. • Repayment of $1,102,462.00 is required from non - federal funds by November 4, 2010, to clear the funding. He reminded the Corporation that the City Council had approved a Section 108 loan for the Mercado project on the north side of the City that would be undertaken by a private developer with the goal of creating 109 jobs. He pointed out that the project was not completed and the City had to take it back and finish it which resulted in selling the property to the current owners. He advised that the 109 jobs had to be new jobs; however, what occurred was that the tenants that moved in were the United Way and other existing businesses in Fort Worth which did not constitute new jobs. Mr. Chapa stated that part of the Section 108 payments before the property was sold were made with CDBG funds for the overall loan which was for the whole north side Main Street project and included the Mercado project. He added that as part of the HUD findings the City had to repay $1.1 million. He pointed out that the City Council had also approved a Mayor and Council Communication (M &C G- 15811, dated August 14, 2007) that authorized the Fort Worth Housing Finance Corporation to have administrative control of the Fort Worth Housing Trust Fund. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, OCTOBER 5, 2010 PAGE 4 Adopt Resolution Authorizing the Use of $1,102,462.44 from the Non - Federal Portion of the Fort Worth Housing Trust Fund to Reimburse the U.S. Department of Housing and Urban Development for Monitoring Findings on the Mercado Protect (cont'd) (Agenda Item 5) Mr. Chapa concluded his presentation by advising that the staff recommended the Corporation approve the resolution to repay the $1.1 million from the non - federal Housing Trust Fund by November 12, 2010. He added that the funds would go back into the City's General Fund in the Fort Worth CDBG line of credit that could be used on other projects. Vice President Scarth opened the floor for discussion on this issue. There being no discussion, Vice President Scarth opened the floor for a motion. MOTION: Upon a motion made by Director Espino and seconded by Director Zimmerman, the Board voted six (6) "ayes" and zero (0) "nays ", with President Hicks temporarily absent and Directors Moncrief and Burdette absent, to approve Resolution No. FWHFC 2010 -13. The motion carried. Assistant City Manager Tom Higgins asked Mr. Chapa to clarify if approval of the resolution would completely absolve the City with HUD on the Mercado project. Mr. Chapa stated that it did absolve the City from any issues related to the Mercado project. Mr. Higgins asked Mr. Chapa if this resolution allowed staff to close out any other issues from previous years. Mr. Chapa stated that it did not; however, it did close out the major issue related to the one (1) year for use of the CDBG funds and did eliminate another major finding that was a big dollar amount. (President Hicks arrived at the meeting.) Director Moss asked what year the repayment would be deposited. Mr. Chapa responded that the actual payments were from 2000 -2005 CDBG line of credit, so the repayment would be deposited into the appropriate CDBG program year. Adopt Resolution for the Dissolution of the FW City Construction Company, LLC (Agenda Item 6) Mr. Jay Chapa, Assistant General Manager, addressed the Corporation regarding the proposed resolution. Mr. Chapa stated that the Corporation created the FW City Construction Company, LLC, in 2005 with the goal of using the construction company to be the general CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, OCTOBER 5, 2010 PAGE 5 Adopt Resolution for the Dissolution of the FW City Construction Company, L.L.C. (cont'd) (Agenda Item 6) contractor on projects within parts of the City where developers could not be obtained to build single family homes. He added that over the last few years since the merger of the Housing Department with the Economic and Community Development Department, he had an opportunity to look at the overall program and how the company was utilized after becoming Director, and there had been a change in philosophy in how staff approached in -fill housing. He advised that the Corporation would still be used as a funding source and the owner and developer in some projects, but the intent was to hire private contractors to serve as general contractors to perform the actual construction. He added that there had been instances where having a City owned - construction company that served also as the general contractor and then warranty issues occurring on the home, resulted in no real black and white division from the buyer's standpoint of what the issues were and this oftentimes became a political concern for the Council. Mr. Chapa concluded his presentation by stating that staff recommended the Corporation dissolve the FW City Construction Company, LLC, and move forward with the Corporation serving as the developer and contracting out with home builders that would provide the warranty needed as the general contractor for each project. He added that in order to eliminate administrative costs associated with this, e.g., bank accounts, reporting to state, etc., staff was recommending that the Corporation approve the resolution to dissolve the company completely. President Hicks opened the floor for discussion on this issue. There being no discussion, President Hicks opened the floor for a motion. MOTION: Upon a motion made by Director Espino and seconded by Director Jordan, the Board voted seven (7) "ayes" and zero (0) "nays ", with Directors Moncrief Burdette absent, to approve Resolution No. FWHFC 2010 -14. The motion carried. Requests for Future Agenda Items (Agenda Item 7) President Hicks opened the floor on requests for future agenda items. No requests were made by Board members. Adiourn (Agenda Item S) With no further discussion, President Hicks adjourned the called — special session of the Fort Worth Housing Finance Corporation Board at 12:19 p.m. on Tuesday, October 5, 2010. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, OCTOBER 5, 2010 PAGE 6 These minutes approved by the Fort Worth Housing Finance Corporation Board of Directors on the 7th day of December, 2010. APPROVED: Kathleen Hicks President ATTEST: Frank Moss Secretary Prepared and respectfully submitted by: onald P. Gonzales, C /CMC Assistant City Secretary