 all of our other commissioners are with us. Thank you, Steve. We're currently at 130 chair test and Commissioner Downey hasn't logged in yet. Would you like to wait further for him? We'll give him another minute. All right. I think we will move forward and hope Commissioner Downey is able to join us shortly. I'd like to call the meeting of the Santa Rosa Housing Authority to order on January 24th, 2022. Due to the provisions of the governor's executive orders, N-25-20 and N-29-20, which suspend certain requirements of the Brown Act and the order of the health officer of the County of Sonoma to shelter in place to minimize the spread of COVID-19. The Planning Committee, excuse me, the Housing Authority will be conducting today's meetings in a virtual setting using Zoom webinar. Commissioners and staff are participating from remote locations and or practicing appropriate social distancing. Members of the public may view and listen to the meeting as noted on the city's website and as noted on the agenda. Members of the public wishing to speak during item five public comment or during our public hearing items will be able to do so by raising their hand and will be given the ability to address the commission. As a matter of housekeeping, I'd like to remind commissioners to keep their audio on mute unless they are speaking. Commissioners other than chair commute themselves. Staff will remain muted until meeting to speak. As members of the public join the meeting, we will be participating. You will be participating as an attendee. Your microphone and camera will be muted. Only today's panelists will be viewed during the meeting. If you are calling in from a telephone and choose to speak during the public comments portion of today's agenda for privacy concerns, the host will be renaming your visible phone number to quote resident or digits of your phone number. The city of Santa Rosa is committed to creating a safe and inclusive environment free from disruption. We will not tolerate any hateful speech or actions and are well staffed to monitor that everyone is participating respectfully or they will be removed. If necessary, we will also immediately end the meeting. Zoom host, can you please explain the public comments that will be heard at today's meeting? At each agenda item, the item is presented. The chair will ask for housing authority member comments and then open it up for public comment. The host in Zoom will be lowering all hands until public comment is open for the agenda item. Once the chair has called for public comment, the chair will announce for the public to raise their hand if they wish to speak on the specific agenda item. If you are calling in to listen to the meeting audibly, you can dial star nine to raise your hand. The host will then call on the public who would raise their hands. Public comment will be limited to three minutes and a timer will appear on the screen for the commission and public to see. Once all live public comments have been heard, the meeting host will reread email public comments. If you provide a live public comment on an agenda item but also submitted an email, your email public comment will not be read during the meeting. Additionally, there is one public comment period on today's agenda to speak on non-agenda matters item five. This is the time when any person may address the housing authority on matters not listed on the agenda, but which are within the subject matter jurisdiction of the housing authority. Thank you. We'll now move on to roll call. We'll now do roll call for attendance. We'll start with Commissioner Burke. Here. Commissioner Downey. Here. Commissioner McWhorter. Commissioner Rawhouser. Here. Commissioner LePenna. Here. Vice Chair Owen. Here. Chair Test. Here. Let the record reflect that all commissioners are present. We'll move on to item number three, statements of abstention. Do we have any commissioners that need to make a statement of abstention? Okay. Seeing none. We'll move on to item number four, study session. Good afternoon, Chair Test. And members of the housing authority, we have one study session this afternoon. It is the fiscal year 2022, 2023 budget process and public input. I will be presenting as well as Kate Goldstein, administrative services officer. Next slide, please. So this slide will capture some of the items we'll be considering and reviewing today. So the city council has identified a focus on housing and homelessness as one of their council goals. And just to keep you updated on their process, they will be convening in late February to review their goals for the upcoming fiscal year. And so I will keep you apprised of how those will be evolving. One of the factors that has played into our budget for the past couple of years and continues to be a present funding source are the community development block grant, disaster recovery funding. And as you may recall, this is about 38.5 million that we received as a result of the damage from the tubs and nuns virus of 2017. Our budget has also been influenced by COVID related funding. This includes the community development block grant coronavirus funding. And these were specific funds that were used to assist in additional homeless programs and services in the year 2020 and 2021. We've also received emergency housing vouchers. These are the 131 additional vouchers that we are administrating in coordination with the Sonoma County Continuum of Care to address homelessness in the area. And then we have the home ARP funding. And this is approximately 2.6 million in funding that we will be receiving and we'll be rolling out in the near future. And again, this is to provide additional resources to create housing for homeless individuals. Other factors of our budget include an increase in compliance monitoring due to the numerous units we are bringing online. Again, as a result of the CDBG DR funding that's creating over 370 additional units will have additional compliance monitoring revenue in the near future. And then the city council as part of their PG&E settlement funds. And this was nearly $100 million that the city received as a result of damage from the 2017 fires has identified about $2 million for down payment assistance. And this will be a new program that the Department of Housing and Community Services will be implementing in spring of 2022. Next slide, please. And now I'll turn it over to Kate Goldbein. Hello, can you hear me? Yes. Thank you. Good afternoon, Chair Tess and Housing Authority commissioners. I am applying the administrative services officer for the Housing and Community Services Department. Today I'll be reviewing the Authority's fiscal year 2223 funding and expensive assumptions and taking notes on the public feedback that we receive. So the current slide shows the preliminary funding assumptions for fiscal year 2223. And as noted on the slide, these assumptions may change as we receive new information. It's an interesting year. There are potentially several large increases to housing trust funding due to one-time actions. So first, as many of you know, the city council has policies 0000-48, which allocates a portion of real property transfer tax to housing and homeless services. And that amount increases 5% annually. For 2223, the city's total RPTT estimate is $5 million and 45% of that is allocated to housing and homeless services equaling 2.25 million. So currently the city's finance department plans to fund the entirety of the homeless services budget with one-time American Rescue Plan Act funding, ARPA, which means that the 45% allocation of RPTT would go to the housing trust. This would be an enormous increase over the 21-22 amount of about $500,000 to the trust. So I'm still working with the finance department to make sure that all homeless services expenses are eligible for the ARPA funding. If they are not, then RPTT would cover them. And the city is gonna be reviewing its one-time funding allocations at its meeting on February 15th, if you're interested in hearing more about the ARPA funding. So moving on, we're projecting slightly less impact fees, impact fee revenue than in prior years, down $100,000 from $1.5 million to $1.4 million. And this is based on Megan and my analysis of the trends for the past few years. The other large one-time funding source is loan pay-down from the Lantina project plus residual cash receipts. Last year we had $400,000 available in loan repayments and pay-downs. And we anticipate over $2 million in fiscal year 22-23. Compliance fee revenue is also up. And I see, so it should actually be $150,000. We received information after this presentation was turned in that we would be receiving about $20,000 more than we had in the past few years. And this is due to the new affordable units coming online that require compliance monitoring that Megan mentioned. So it should say compliance fee is $150,000. And then finally, the largest source of funds to the authority is federal funding from HUD. And that has to be used for very specific programs and activities. So 100% of the housing choice voucher and emergency housing voucher program funding comes from HUD and a large portion of the trust funding as well. So we received good news from HUD late last week after this agenda and presentation had been published about the housing choice voucher program funding. Both the Senate and House budget bills fund housing assistance payments at 100%, meaning there is no reduction or peroration due to lack of funding. And then additionally, both the Senate and House bills propose increasing the amount of administrative fee given to the authority. The Senate bill would increase it by 9% and the House bill by 6% over our current level. And then for the trust, we have not received any information from HUD yet about the CDBG home and HOPA allocations, but that's normal for this time of year. We generally receive information anytime from February to May. And we will use the current year allocation as placeholders and adjust the final budget once HUD releases their information. Next slide, please. Thank you. So this slide notes our preliminary expenditure assumptions for the 2223 budget. And please note again, this is all subject to change as new information comes in. We do anticipate increases in both divisions for a few reasons. There'll be changes to, there'll be reallocations of the director position between the two housing divisions and homeless services. The director was recently permanent after being filled on an interim basis for over a year. We anticipate more of a normal event allocation between all the divisions that the director oversees. Workload has increased in both divisions as well. As noted in the funding slide and Megan said, the units requiring compliance monitoring have increased. So we'll need to ensure we have staff to cover those duties. And in the rental assistance division, we're continuing the home-funded tenant-based rental assistance program, which has an anticipated client load of 40 to 50 families annually. Additionally, the ARPA, American Rescue Plan Act, Emergency Housing Voucher Program added 131 clients to our caseload. And finally, the federal waivers suspending in-person inspections have ended. And we have a backlog of over 1,000 units to inspect. So we need to ensure that we have staff to perform all these duties. Also, there have been city-wide salary increases for staff as the city and its unions agreed to cost of living increases. Additionally, benefits generally increase about 10% annually. And we have not yet received the updated salary and benefits information from the city's finance department. So this is preliminary based on past years. And then finally, there'll also be an increase in rental assistance payments due to the emergency house vouchers coming online and being leased up. The program started in June, 2021 after the budget had already been adopted. So the housing authority appropriated the funding via one-off resolutions. And now it'll be included in our base budget. Next slide, please. This slide notes the approved budget process timeline, which just runs concurrently with the cities. We will hear public input on the budget today and the city council will hold their public input sessions on February 15th. We'll start formulating and entering the budget soon and we'll conclude at the end of February. Internally, we'll review it with the city's finance department and city manager in March or early April. We'll be back in front of you on April 25th with a detailed presentation of the 2223 budget. And then we'll go to city council in early May to present the entire housing and community services department budget with all the other city departments. We will return to the authority on June 20th to ask you to adopt the budget prior to the city council adopting the entire city budget the following day on June 21st. Next slide, please. All right, so this concludes the presentation. I'm available to answer any of your questions. Commissioner, so we have any questions at this time for Kate? Vice chair Owen. Thank you. I wanted to go back to something that I've been interested in since I've been on the housing authorities. So the real property transfer tax of two and a quarter million dollars is all going to go to the housing authority. Has this ever happened before? No, in general, it has been split between homeless services and the housing trust. And this year, because of the one-time ARPA funding has the potential to go entirely to the housing trust. But if I could also interject, it has gone to the Department of Housing and Community Services for administration of affordable housing and homelessness. So this is just a slight nuance and it won't be applied to homelessness directly but we'll be going towards affordable housing in the upcoming fiscal year. And that these funds will go out in ANOVA? One likely? Correct, that has been our process is to roll out the funds in a spring NOFA. And then the emergency housing vouchers, when do those expire? So, Liv may need to step in but my understanding is that they do not expire. We have 131 of them and as soon as somebody comes on the program, they're on it for the length of time that they need it. But once they come off of it, we're not allowed to re-issue that voucher. So eventually they will all expire because people won't need them anymore. And the federal government's gonna continue to fund that through that program? Correct. Is there a sunset on that funding date? Not at this time. Thank you. Thank you, Vice Chair Owen, Commissioner Burke. Thank you. And just following up on the real property transfer text when it was originally adopted, it was brought forward actually by a member of the Housing Authority and the Housing Authority staff at the time. And it was initially intended to, and 100% of it was intended to support affordable housing. And then over the years that had changed but that was the original intent of that. That was what Housing Authority proposed and that's what the city council adopted at the time. But as I say, over the years that has changed. So that's just a piece of information. The only question I have is, I think it's good news overall, but the down payment assistance program, I heard you say, Kate, I think that that would be something that would be administered in the housing community. Services department, would the Housing Authority have any role in that program at all at this point? Megan, can you help with that one? Yeah, so we will be taking program specifics back to the city council in February. But the way it is envisioned right now is the funds would be in the Housing Authority's budget and we would administer a program similar to how we handle our current home ownership loans like we did for Lantana or other subdivisions. So it would be a silent second with 3% deferred interest rates to households that are at or below 120%, which is moderate income for units that are located within the Santa Rosa city limits. And the other component of the program that was strongly messaged by council members is that the buyers would be required to complete a home buyer counseling course. So that would be a requirement prior to them receiving a pre-award that they are eligible for the down payment assistance. Thank you for that. So the Housing Authority, it's in the Housing Authority's budget is what I heard you say. So there will be the responsibility of the Housing Authority, obviously, with the staff support to administer that program. Is that correct? Correct. And if there is an interest from the Housing Authority, I'd be happy to bring this program forward in the study session once it has been included in the council's action in February. So we could look at a March study session if there is an interest for that. I certainly think that would be a good idea. Important. Thank you. And that is not yet included in the Authority's budget because or in these assumptions, the funding assumptions yet? I understand. Any other questions by commissioners? Commissioner Downey. Under the guises of an assumption, I don't know if it's fair to ask you, Megan, if you have any predictions or just not on the data yet to make the next articulation pertaining to preliminary assumptions pertaining to funding. I'm not sure I understand the question, but in terms of our anticipated budget for fiscal year 22, 23, we are anticipating it being a slight increase over fiscal year 21, 22. Right now, Kate outlined the areas where we know there will be an increase in available revenue and due to a lack of information right now from HUD, we are anticipating that our CDBG home and hop wall resources will be flat. And certainly if we receive information that there's an increase or a decrease I will convey that at the next available meeting. Thank you. Any other questions from commissioners? I have one question for Kate. Kate, you had mentioned due to a thousand more units that need to be inspected. When you use the term inspected, are you talking about physical inspection or are we talking about documentation of income, et cetera? We're talking about physical inspection, particularly for the housing choice voucher program. Okay, great. Thank you. All right, any other questions of staff at this time? Okay. Thank you. Thank you, Kate. Thank you, Megan. I'm sure, Tess, I do believe we should open for any comments before we conclude this item. Yes, of course. We are now taking public comments on item 4.1. If you wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine to raise your hand and you will have three minutes. Chair Tess, I see no hands raised at this time. Thank you. We'll move on then to item number five, public comments on non-agenda items. Excuse me. We are now taking public comments on item five, non-agenda matters. This is the time when any person may address the housing authority on matters not listed on this agenda, but which are within the subject matter jurisdiction of the housing authority. If we wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine to raise your hand. Chair Tess, I see no hands raised at this time. Thank you. Moving on to item number six, approval of minutes of the December 13, 2021 meeting Are there any changes? See no comments from staff. In that case, we'll move on and assume that these are approved. Item number seven, chairman commissioner reports. There is no report from the chairperson myself. Are there any commissioner reports? Anybody to share anything? I see none. We'll move on to item number eight, committee reports. There are no committee reports on this particular agenda. Item nine, executive director reports and communication items. All right, thank you chair, test and members of the housing authority. I just want to give everyone a couple of quick updates on staffing in the department. As many of you are aware, I was appointed director in December, so that was able to fill in a long-term vacancy. As a result of that, we are currently recruiting for a housing and community services manager to fill the position that I had previously held. That recruitment will be open until February 1st. And then as Kate noted in the budget study session, we are adding a housing and community services technician at the mid-year budget update, assuming council approves that, which will be on February 15th. And specifically this role will be to assist with the backlog of inspections due to the waivers from COVID, to help address the increased workload as a result of the project-based voucher units that are under construction and coming online. We have almost 200 of those that we're anticipating in the next year or so. So that will be a significant increase in our inspection needs. And then also just to help assist with our Section 8 housing choice voucher staffing. So we are very hopeful that that position will be approved and that we'll be able to bring somebody on board in the spring to assist with those tasks. So I'm happy to answer any questions about those items. And then you will also will note that there is a communication item attached to the agenda. And this is an update to the housing pipeline. We are gonna try and push these out to you quarterly. So this captures the period through December 31st, 2021, and gives you an update on the projects that we currently have underway. Commissioner Downey. Hi, Megan, can you please repeat your new title and congratulations? Thank you very much. I am the Director of Housing and Community Services and then also the Executive Director of the Housing Authority. So is that similar to what Dave Gwine was doing? That is correct. That is the same role that Dave Gwine filled for many years. Thank you. Vice Chair Owen. I was curious about the number of inspections that need to be done. Is that something that's done in-house or do you have outside people that do those inspections? Those inspections of the housing choice voucher units are done in-house by one of our housing and community services technicians. So that's an individual that's on staff and they are of the units that are occupied by either a voucher holder or a project-based unit. And so this is a long-standing requirement of HUD. So this is not a new requirement. It's just an increase and then a result of the waiver. Is the city looking to possibly hire a third party to be able to do that in the short term to be able to get this bulge out of the system? We have not discussed having a third party do it. We've had a lot of success by having our own internal staff do it. So there is continuity in the inspections and then we have consistent expectations of what the staff are doing and how they're performing. Okay. And then I appreciate your report and showing what's on the pipeline and what's being completed. How does this transfer to the city's RENA numbers? Unfortunately, I don't have that data for you today but we can certainly provide you that at our next meeting or through a communication. Okay. Thank you. Commissioner Rahasar. I think you're on mute, Commissioner Rahasar. I was just curious about the inspectors. Would they be federal HUD employees or will we be bringing them in as center as employees and will they be under the housing authority? So all of the individuals that filled the roles through the housing choice voucher program are employees of the city of Santa Rosa. They operate under the guidelines of the federal program but they are city staff. And so these could be the individuals that serve as case managers for our voucher holders and that currently come to do on-site inspections. It's therefore they tend to be local people that we'd be hiring locally not coming from out of state or something. We generally hire within the area is what our staffing has been recently. Thank you and congratulations. Thank you. Commissioner Burke. Yes, I'll add my congratulations to Megan. It's been a long time and coming but I'm really happy that that decision has been made and we have you as our leader from this point on. So on the inspections has the COVID issue compromised the ability to get into the units to make the inspections? I am going to call on Elizabeth Durham who is the program specialist that oversees our housing choice voucher team and she can provide you with her perspective on that. Hello. If you wouldn't mind repeating the question, Mr. Burke. Yeah, I guess my question is given the COVID situation probably impossible we're certainly difficult to get into the units to do a physical inspection. And I guess my concern is that that may have compromised the ability to have information on the conditions you know, and to up well, yeah. To have information on the conditions to be able to act on those if there are problems. So that is correct. During the initial shutdown with COVID we were under a waiver that we did not have to perform the inspections and that's what created the backlog. And now that we are playing catch-up so to speak the current surge in COVID is causing some delays in getting that completed and having additional staff would help to eliminate some of that backlog. I guess kind of what I'm hearing is we really don't know because we haven't really been in the units to the degree that we once were able to accomplish. Yeah, okay, thank you. Right, we've probably performed over 300 inspections in the last three months. And the observation is that there was some neglect on the landlords part and the tenants part but we're getting the items are being noted and things are being repaired. Thank you. Yeah, it's difficult to ask always but more so because of COVID and getting behind the curve on that. So thank you for that. And then I have a question that's also a little thanks for the pipeline information. On the Mahoney and Glenn project, it says it's scheduled to be completed in September of 2023. And I know that hasn't, I don't believe it has anyway, started construction yet. Can you give an update on the status of that project and the likelihood that it will be completed by September of 2023? Nicole, if you're able to feel this question, it'd be great. Hi, good afternoon, commissioners. Nicole Rappen here. Can you please repeat the question? Yeah, Nicole, on the Mahoney and Glenn, it has a construction completion date of 2023. And I don't believe they started construction yet. What's the status on that development? Is it going to be moving forward soon or is it moving forward now? Yes, the project continues to move forward. It has not begun construction yet, but they are moving forward with obtaining the rest of the funding commitments that they need for the project, which are anticipated in the next few months. And then construction would commence thereafter. All right, thank you. Commissioner LaPenna. Yeah, I was wondering, do we have a checklist of the items that get inspected when they go into these apartments? I was, it was interesting to hear that the landlords are falling a little bit behind on repairs and whatnot. So I don't see Liz unmuting, but yes, there is a checklist that needs to meet the housing quality standards. And this is established by HUD for the Housing Choice voucher program. I think it's important to keep in mind that because there was a waiver during COVID, inspections weren't conducted in person for over a year. So there could be some things like we routinely check the smoke detectors and other aspects of the units to make sure that there is a safe living environment. Could we get a copy of that checklist? Yes. Thank you. And congratulations, Megan. Good job. Any other questions of staff? Seeing none, I also really appreciate the work that Megan has done both before her official title and while she was interim. And thank you for the pipeline updates. These are always helpful to me when I'm looking ahead to see where we're at on each of these ones that we've already agreed to fund or are expecting to fund. Thank you. Moving on to item number 10, consent items. I'm sorry if I made, did we check for public comment? This is on the communication items. I don't see it on the annotated agenda, but I'm happy to open it up for that. Okay, thank you. Chair Tist, there are no hands raised at this time. Okay. Thank you. I just want to find the wording. All right, we will move on then to item number 10, consent items. There are no consent items on this agenda. So we'll move forward on item number 11, report items. All right, item 11.1 is a report item. Bennett Valley Apartments Modification to Prior Funding Commitment to Allow $2 Million of Pre-Development Loan Funds to be Secured by Repayment Guarantee. And Julie Guerin, Program Specialist, will be presenting. Good afternoon, Chair, Testing Commissioners. My name is Julie Guerin and I'm a Program Specialist for Housing and Community Services for the City of Santa Rosa. Today we have a report item for you for Bennett Valley Apartments. This is a Modification to Prior Funding Commitment to Allow $2 Million of Pre-Development Loan Funds to be Secured by a Repayment Guarantee until the property is purchased by developer and to align the term of the note with the term of affordability. Next slide, please. Okay, just first a quick reminder about the project. Bennett Valley Apartments is a 62-unit affordable housing project being developed by Freebird Development Company, LLC. On May 10th, 2021, after a competitive NOFA process where the project ranked number one, the Housing Authority approved Resolution 1717, conditionally committing $5.8 million in loan funds to the project. The project is a new construction at the site of the former Bennett Valley Senior Center complex and is comprised of 62 units, 51% of which are targeted for homeless individuals and families. Next slide, please. Here is a locational graphic and as previously mentioned, this project is located at the site of the former Bennett Valley Senior Center at 702 Bennett Valley Road on the corner of Rutledge and Bennett Valley. Next slide, please. Some background on May 10th, 2021, Housing Authority adopted Resolution 1717, conditionally committing $5.8 million in loan funds to the developer for the project. On June 21st, 2021, Housing Authority approved Resolution number 1719 to modify the prior commitment to allow loan funds to also be utilized for pre-development related costs. Next slide, please. On June 29th, 2021, a disposition and development agreement or DDA between the developer and the city was executed by city council or at city council. The DDA outlines the conditions and responsibilities of the city and the developer related to the sale of the property, including securing all funding sources. This site is currently owned by the city and will be sold to the developer once the conditions outlined in the DDA are fulfilled, including the requirement that the developer shall have secured all funding sources. And the current timeline for the developer to obtain all funding commitments is early 2023. Next slide, please. So the developer request is to fold. The first part of the request is to allow 2 million of the award to be secured by a repayment guarantee rather than by a deed of trust recorded against the property for the interim term until the developer purchases the property from the city. The second portion of the request is to align the term of the promissory note with the term of the affordability for the project. And in the following slides, we'll go into a little more detail about both of those. Next slide, please. Okay, the first portion of the request is to allow the 2 million and pre-development award to be secured by a repayment guarantee rather than by a deed of trust recorded against the property for the interim term until the developer purchases the property from the city. So the standard practice of securing loan funds is by deed of trust recorded against the property at the time of sale. And I just would remind you that the conditions of the DBA agreement require all financing to be secured in order for the sale of the property and subsequent recording of deed of trust against the property to occur. And this is estimated to occur in 2023. In light of this, the developer is requesting that 2 million and pre-development funds be secured by a repayment guarantee until the sale of the property and recording of the deed of trust allowing the developer to access pre-development funds now. So in order to do that, the prior housing authority commitment would need to be modified to allow for two separate loans, one for 2 million for pre-development related costs and one for 3.8 million for construction related costs. Next slide, please. So analysis, what is a repayment guarantee? A repayment guarantee is an agreement between the housing authority and the developer's financial partner, in this case LNM development partners LLC. The repayment grantee legally binds LNM to perform all obligations and pay all monetary obligations, damages, costs, fees, expenses, or any other liability approving to the housing authority. The repayment guarantee is the means of securing the $2 million pre-development funds in the interim time until the conditions of the DDA agreement are met. The full housing authority award of 5.8 million would be secured by a deed of trust recorded against the property at the time of sale. Again, once all funding sources are committed. The repayment guarantee would terminate when the deed of trust is recorded. Next slide, please. Okay, returning now to the second portion of the request. The second portion is to align the term, align the term of the promissory note with the term of affordability for the project. The term of note is typically 55 years from the date of note executed at closing. Term of affordability is 55 years from the commencement of term when the units are rented. So this normally occurs upon construction completion and anticipated construction completion is December 31st, 2024. Extending the term of the note would add approximately three years to the term. Next slide, please. Okay, so now we'll review a little bit of the reasons for the developer's requests. So starting with the repayment guarantee. Approval of a repayment guarantee to secure the pre-development loan funds allows the developer to access the pre-development funds now. This will save the project over $100,000 in high interest costs. And it expediates design, development and construction document faces to better position the project for new opportunities as they arise. Without the repayment guarantee and subsequent access to pre-development funding, the developer will not be able to access the housing authority funds until early 2023 after the pre-development phase. As stated above, this would cost the project $100,000 in additional interest costs and could delay design and development. Next slide, please. Oh, I'm sorry, I see Jeff, you have a Jeff Owen. You have a question, Commissioner Owen? I'll wait till the end. Okay, so the second part of the developer's request is the approval of alignment of the term of note which the term of, with the term of affordability which extends the term of the note by approximately three years. So the alignment of terms would better position the project to receive future funding awards for HCD programs, programs such as No Place Like Home and Multi-Family Housing Program. Next slide, please. So the recommendation, it is recommended by the Housing and Community Service Department that the housing authority by resolution allow 2 million of the conditional commitment of loan funds for pre-development related costs to be secured by a repayment guarantee until the property is purchased by the developer and to align the term of the note with the term of affordability. And now we can answer any questions. Thank you very much. Commissioner Owen. Thank you, Chair. Chair, I want to test a few questions. So they were awarded 5.8 million and they're only looking to use 2 million now until the project is entitled and they'll be transferred to their name. Is that correct? Yes, that is correct. Essentially this request would require us to split the funds into two loans and 2 million would then be utilized for pre-development and the remaining 3.8 would be utilized for construction related costs. So the note is only for 2 million dollars? Yes, it would have a separate note. And was any financial, the payment guarantee is coming from L&M? The repayment guarantee would be an agreement between the city and L&M which is the financial partner of Freebird Development who is the developer of the project. Should it be the city of Santa Rosa or the housing authority? It will be the housing authority. Yes, my name is Paul Jesus. And then was any analysis, financial analysis done on L&M to say they had the capacity to repay that 2 million dollars in cases project did not go through? Yes, actually the L&M was originally, they submitted their documentation in the original NOFA process when we first analyzed the financial stability of the project. And so we have already reviewed their documents and the company prior to this request of the developer as part of the NOFA process. But wasn't that analysis done well over a year ago? That would be almost a year, yes. Okay, I'd recommend that updated financials be reviewed because as we all know this past two years has not been the norm for any company or any institution. And then where's the project of the entitlement process? So, excuse me, are you asking at what point will the process be, or the project, or the, sorry, the site be purchased? Is that the question? Well, my understanding is for the presentation is that they purchase, the contingency on purchase is that they need to have all their financing in place which is not the same thing as having the city approve the project because they go hand in hand but where's the city in terms of approving the project? And Vice Chair Allen, Nicole Roth been here to answer your question. The project has been fully entitled through SB 35. Oh, okay, so using SB 35, perfect. Correct. All right, thank you. And then this is probably a question for Jeff Burke. Why can't the city provide a deed of trust to the housing authority for the two million? I don't know the answer to that. Has that been reviewed? The repayment guarantee has been reviewed with real estate counsel and that issue just did not come up. Megan, do you have any, or Nicole, do you have input on that? When we worked with our outside counsel on this particular request, the deed of trust from the city was not an option that we reviewed, the developer was open to providing us with the repayment guarantee and so that was the option we pursued. And outside counsel has reviewed the repayment guarantee. I think he completed his review early last week. Okay, I've seen in my professional career where a city has provided a deed of trust on a piece of property for pre-development funds and the beneficiary of that deed of trust was the housing authority. So I have seen it done, but it's just a question for it. A couple of comments on that and because this project is so far down the path of entitlement and I'm not sure where they are in their financing, getting them pulled together, but there's a bit of a mismatch in my opinion that the two million dollars shouldn't have a 55-year term probably a three to five-year term because if the project is not going to go forward for any number of reasons, the housing authority should be able to look to have those funds repaid as soon as possible not over a 55-year period. So that's one comment on that. I'm not making a recommendation to change in this instance but I would appreciate the housing authority and staff would look at that going forward because 55 years is a long time. And I think we did something similar for John Stewart Company where they had a project for pre-development which the applicant is absolutely accurate. Getting pre-development funds is extremely difficult in financing either from commercial banks or from tax credits or such because it's a lot of money to be able to get all your architect and engineering entitlements done and pre-development money is difficult to obtain. So I understand the need. I would just prefer in the future that staff would look at having a shorter term on pre-development loans. And then when it is the deal is approved and the rest of it is to be funded, that note could be redrawn, it could be reissued to be the 55-year term. That makes far more sense than having a 55-year term on two million dollars for a project that's not even, it's well down the path. We're probably a year out which for development is short-term but it's still too long for a project that's not fully entitled or fully financed. So those are my comments on this. Thank you. Thank you. Commissioner Downey. There's a good chance that this question has already been answered. But I'm just curious, is there any elevated risk with a repayment guarantee as opposed to a deed? And I think, Jeff, you may have alluded to that in your set of questions. Yes. It's definitely not the normal course of action. However, we did review the repayment guarantee with outside legal counsel. And it so far has been to be sufficient security. And I'm not sure if anyone else wants to add anything to that but that will be my answer. Commissioner Downey, to add on to Julie's answer, I would say that the risks are different, not necessarily greater or less with this repayment guarantee. Should the developer choose to not move forward with the project before all funding sources are committed, the city retains ownership of the land since it is a requirement to have all funding sources committed prior to the sale. So the city has that vested security. In addition, the process by which the housing authority would have to go through if there were a default with the deed of trust and includes foreclosure proceedings and an extensive amount of staff time as well as legal counsel time to go through those process to recoup the funds with the repayment guarantee. The repayment guarantee for these two years is essentially making it so that the developer cannot get out of the requirement to repay the loan. They are not able to include it in any bankruptcy proceedings. So the risk is different. I wouldn't say that is greater or less but not our typical course of business. Oh, that's what we do the rest is not typical course of business. Thank you. Thank you. Commissioner Burke. Yes, thank you. My first note was I was interested in listening to Commissioner Owen before I made my comments and questions. So thank you, Jeff, for going forward on that. Good. Are we setting a precedent by approving this? Maybe that's a question maybe more for Megan and Jeff Burke. I don't think that we're setting a precedent. These are rather unique circumstances in that it is a city asset that the developer was selected through a request for proposal process, I believe back in 2019. And as we negotiated through the exclusive negotiating agreement and the development and disposition agreement, one of the stipulations has been that they obtain all their financing prior to the city selling the property to them. So we have both the city and the housing authority having a role in the development. And unfortunately, this is kind of where it's come together. We've developed an issue. But I don't think that this is setting a precedent because with the exception of this property, the only other city asset that comes to mind where the city has owned it and the housing authority has funded it were the Benton Veterans Village Apartments. And that's the seven-unit project on the corner of Benton and North Street. So it's a rather unique set of circumstances. And I certainly think that all parties are looking forward to the Benevale Senior Center site being redeveloped for a great use. And if I just may add a couple of points and I agree with everything Megan said, I think we are in a pretty unique fact pattern. But as far as precedent goes, certainly from a legal standpoint, there is no legal precedent here. Each case would come to you individually and you would decide based on the facts and circumstances if you want to approve it or not. Now that's not to say that you might get other developers to come knocking on your door, but as far as a legal obligation, and it is pretty unique that the city happens to own the property. Good question. Well, thank you for that. Who's the outside counsel on this? You mentioned an outside counsel being used. What firm was that? BBK Best and Krieger. I mean, that's Krieger. So, say it again, please. Best and Krieger. That's who the city has been using. I don't want to get too much in the weeds here, but we lost one of the attorneys in the city. The attorney's office a while back who kind of had a little specialty niche in real estate and quite candidly, the city's been doing so much work in this area that, you know, we're trying to figure out how we want to proceed with regard to that. But the firm that's been in place now for the last couple of years who's been advising the city has been Best Best and Krieger. Are they a local firm? Is that a curiosity? I just thought for a minute. They're not particularly local, but they're kind of specialized in representing public sector clients. Okay. And just one more little tidbit on that, too, is that at the end of redevelopment, Iris Yang, who was our longstanding redevelopment attorney was with BB and K. So we have experience with them in a different aspect of. Okay. Thank you. Will this, will this actually, so the city council approved the disposition and development agreement last summer? Will this action by the housing authority require that that agreement be reviewed and approved by the city council if we were to approve it today? I don't believe so. Okay. Thank you. And let's see here. So I think, I mean, I think Nicole kind of answered the worst case scenario. And I guess in my mind, the worst case scenario would be, what if the developer was unable to proceed with the project and the guarantee to pay the housing authority for the $2 million repayment guarantee is unable to be repaid because the company doesn't have it or there's some issue there that would be, I guess the due diligence would help protect against that but it's not a 100% guarantee. So that is a possibility. So I guess if that worst case scenario, and so I think Nicole, you kind of explained, there would be a process for, there would be foreclosure and there's some provisions in there to retain some of the approval, approvals that have been gained by this developer which may or may not be of any value for the next group that might develop the site. So that's not a huge benefit but I guess that's a worst case scenario as I understand it. I guess my final questions have to do with, what's the value of the property? Is that the fair market value that is going to be repaid to the city? So kind of refresh my memory on what the value of the property is. One second, I can look it up quickly. I'm sorry that I don't have that. I believe that was 1.8 million based on the- Chris, you're first. Yeah, I believe we were in the neighborhood of 1.8 million. So the value of the site as is is less than the $2 million in pre-development funds being requested, which is another reason that the repayment guarantee is actually a better option at this point for the security on the loan. All right, well, thank you. Any other questions of our commissioners? I too had a little concern with regard to if the things didn't work out in this particular situation. And thank you, Nicole, for covering some of those answers to that kind of question. I guess what I would think is if that happens and at some point down the line, another developer would have to step in after going through the process of this guarantee, then the design, whatever, if they have moved forward and spent money for design, then another developer comes and may not want that design or may have to be stuck with that design. Is that a possibility? I will ask for a little help on that question because I'm not sure of the answer. Sure, chair test. So as a standard practice with the housing authority loans, the housing authority retains security interest in the pre-development contracts. So we would be able to move forward with the engineers and architects renderings if we so choose, but we could go back out to RFP outlining that we have designs in hand to complete this project or it would ultimately be up to the developer to decide if they wanted to bid on the project and use their own designs, taking on that additional cost or if they wanted to move forward with the pre-development contracts, I'm sorry, the designs and architectural renderings that the city had already obtained from the existing developer. Okay. Another question regarding the guarantee, is Free Bird one of the signers on that as well as L&M? Yes, I believe Free Bird and L&M both sign on the repayment guarantee. Thank you. Nicole, did you have something to add? Looks like we have another question from Vice Chair Owen. I just want to reiterate. So part of the payment guarantees and assignment of architect and engineering contracts. So if the city wanted, if the housing authority wanted to use those drawings, those would be assigned to the housing authority. Okay, thank you. That's very important. I also just wanted to add briefly Vice Chair Owen with your question about the DOT and why didn't the city offer that up? I won't get into the detailed discussion of it, but our council believes it's in both the housing authority and city's best interest that it did not do so. So I'll just leave it at that. Thank you, Jeff. Another question from Commissioner Burke. Yeah, just what would, okay, let's say this thing. I mean, I don't anticipate this is going to happen. I think there's a good group developing the property and the likelihood of a major problem is probably very insignificant or minor, but what would HUD do if we were to have the worst case scenario and there were a loss on the project? Let's say you lost 500,000 when you put it all together or a million dollars, whatever. What would HUD's position be on that? Because I mean, we are using CDBG funds to a large degree on this project, as I recall. So Commissioner Burke, this is actually a local funds that are in the project so far. So the $5.8 million award from housing authority is all local funds. There are project-based vouchers that would involve HUD that have been committed to their project, but if the project does not move forward, the developer does not keep those project-based vouchers. Thank you. Any further questions by commissioners? Seeing none, we'll now move on and take public comments. We're now taking public comments on item 11.1. If you wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine to raise your hand. You will have three minutes. Hi, can everybody hear me? Yes. Yes, perfect. All right, this is Robin Zimler and I am the manager and owner of free board development. So I'm going to try to address most of the comments that you guys just had or questions that you had in three minutes. Number one, thank you to staff and thank you to commissioners for your continued support for the project. With respect to the question as to why can't the city provide the deed of trust, we ask the same question. We love it if the city did, but instead, we offered up the guarantee which leaves the city as a whole in a better position than with a recorded deed of trust anyway, I think. Again, it gives you the ability to get $2 million back. You get our work product and looking at the city as a whole, you still have the land. With a deed of trust, really all you have is the land. So I think that is the reason why the city was very happy when we said, let's just give you a repayment guarantee. With respect to the commissioner's concern about the 55 year term, there is language that we would likely have in the loan documents, which would make it an event of default if we don't start construction by a certain amount of time. So that protects the housing authority in that respect. Also, with the question regarding LNM development partners and their financials. So Freebird is 51% owned by me and 49% owned by LNM development partners. LNM development partners is a very large affordable housing developer. So they're very well known and versed in this world. They've been in an existence since 1984. Over that time, they've developed over 30,000 units, totaling over 9 billion worth of projects. And I think in the most recent affordable housing finance magazine's ranking of the top 50 developers in the country, they were within the top 20. So again, long history, I know every folks have been impacted by COVID, et cetera. They large, large company with a large balance sheet. And so hopefully that gives some of the commissioners a little bit more comfort over who is LNM development partners. And then I think lastly, there was a question about what a Freebird will sign the guarantee. Actually, Freebird will not sign the guarantee. It's just LNM development partners. And it's not because we're not willing to sign the guarantee. We're happy to sign it. It's because a guarantee from Freebird isn't really enforceable because we are actually the party to the loan documents. So all the obligations that are in the repayment guarantee on behalf of LNM are already, sorry, the ring are already, we've already made in the loan documents itself. So again, not that we're not happy to sign the repayment guarantee, it just doesn't get you much more than what you already have in the loan documents. It's the really the guarantee from LNM development partners that matters. I think that is it. I think I covered everything there. If I didn't, I'm happy to answer any more questions. Thank you, Robin, for your comments. We do have a question. Commissioner Downey. Hi, Robin. I appreciate your input and further understanding the path that you're taking. Are you local? Can folks still hear me? Yes. Okay, great. If by local, you mean Oakland, yes. Oh! If by local, you mean Santa Rosa, no. So you're physically based in Oakland? Yeah. So if this agreement didn't work out, you would not be able to proceed with finishing this project? We'd be able to proceed, but at potential additional costs and potential delays, I should add that we're in a really good place on this project right now. As mentioned, we got our entitlements last year and we applied for MHP funding in the first round that we could after we got our entitlements and it's looking positive on that front. We'll know for sure in February, but it's looking pretty positive there from what I understand from HCV. So we should be in a position with this funding to apply to Sidlack and TCAC in July, which will be the first round that's available to us once we get the MHP award and start construction beginning of next year. Okay, thank you, Robins. Any other comments by commissioners? As long as we have Robin on the line, I see no further questions. Thank you, Robin. Thank you again. At this point, I'm gonna ask the commissioners, is there a motion to be heard here? Do we have a motion to approve? I will approve the resolution, make a motion to approve the resolution and the housing authority for the city of Santa Rosa approving the modification to a prior funding commitment and funds with the amount of $5.8 million to Freebird Development Company, LLC for Vene Valley Apartments to allow $2 million of redevelopment costs to be secured by a repayment guarantee until the property is purchased by developer and modification to the term of the note to align with the term of the affordability and weigh the reading of the document. I will second that. Thank you, commissioners. I will move to a vote. Okay, so at this point, we will do a recall vote regarding this item. We'll start with Vice Chair Owen. Aye. And then Commissioner Downey, Commissioner Rawhouser. Aye. Commissioner McForter, Commissioner LaPenna. Aye. Commissioner Burke. Aye. And Chair Kest. Aye. That motion passes with seven ayes. Did we get Commissioner Rawhouser? Aye. Thank you. Thank you. Well, thank you, everyone. We're gonna be meeting now. I want to thank everybody, including staff, the fantastic job they've done. Very good questions by the commissioners. Thank you so much. Thank you. Thank you. Thank you. Thank you. That's who we meet again.