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HOUSING OPPORTUNITIES COMMISSION OF MONTGOMERY COUNTY 10400 Detrick Avenue

Kensington, Maryland 20895 (240) 773-9025

Minutes

December 7, 2011 11-14

The monthly meeting of the Housing Opportunities Commission of Montgomery County was conducted on Wednesday, December 7, 2011 at 10400 Detrick Avenue, Kensington, Maryland beginning at 4:45 p.m. Those in attendance were:

Present

Roberto Piñero, Chair Sally Roman, Vice Chair

Michael Kator, Chair Pro Tem Jean Banks Rick Edson

Pamela Lindstrom

Not Present Michael Wiencek

Also Attending

Jerry Robinson, Acting Executive Dir. Ken Tecler, HOC General Counsel Kayrine Brown Maryann Dillon Scott Ewart Joy Flood Les Kaplan Tedi Osias Gail Willison Bill Anderson Jennifer Arrington Jim Atwell Vivian Benjamin Scott Cataline Tonya Clark Tom DeBrine Peter Desjardins Terri Fowler Barbara Galloway Cornelia Kent

Sharon Marbley Patrick Mattingly Jim Miller Tomas Montoya Andrew Oxendine Mary Phillips Doug Ryan Lorie Seals Stephanie Simones Dean Tyree Tara Whicker Andrew Zaleski Commission Support Eileen Hartnett Special Assistant to the Commission

IT Support Dominique Laws

Irma Rodriguez

HOC Minutes December 7, 2011 Page 2 of 23

Guests O. Dasent, RAB Manny Hidalgo, Executive Director, LEDC Greg Kearley, Board Chair, LEDC

Carlos Mellott, MCGEO Laura Murray, HCV Landlord Joann Nickles

Prior to the convening of the Commission meeting, the 2011 Longevity Service

Awards were presented to the following staff members:

30 Years of Service Tom DeBrine 25 Years of Service Barbara Eppolito Fran Jamieson-Unger Andrew Oxendine Sylvia Seuss Marsha Smith Winifred Thomas 20 Years of Service Berneta Green Gonzalo Guerra Estelle Martin Mirna Meza-Prather Sharif Rafiq 15 Years of Service Cecilia Henman Mary Phillips Stephanie Semones Susan Smith Gail Willison

10 Years of Service Jim Atwell Johnny Bell Susan Cheney Lynette Garner Ida Koram Tomas Montoya Ninan Samkutty Lorie Seals Soheila Tavakoli William Thomas Younas Yar 5 Years of Service Rose Acheampong Mfela Bandawe Andrea Berry Angelica Carroll Olaseni Cole Rajeshree Dalal Sammy Donkor Patricia Dudley Alison Garraway Miguel Gonzalez Siti Gunawan

Eduardo Gutierrez Rita Hundley-Harris Toni Johnson Roseline Joseph Mieu Lee Adonis Macbutscher Raquel Mitchell Terri Morris Tehanny Pica Byroo Robb Arie Robinson Elliot Rule Eugene Spencer Dynae Staley Rickietta Terry Amy Vega-Arellano Latonya Washington Tara Whicker Jimmie Whitfield Cynthia Zapata 2011 Retirees Betty McCollum-Tate Pete Weir

Chair Piñero convened the monthly meeting of the Housing Opportunities

Commission at 4:45 p.m. The Consent Calendar was adopted upon a motion by Vice Chair Roman and

seconded by Commissioner Edson. Affirmative votes were cast by Commissioners Piñero, Roman, Banks, Edson, and Lindstrom. Chair Pro Tem Kator was temporarily away and did not participate in the vote. Commissioner Wiencek was necessarily absent and did not participate in the vote.

I. CONSENT ITEMS

A. Approval of Minutes of November 2, 2011 – The minutes were approved as

revised.


B. Ratification of Action Taken in Budget, Finance and Audit Committee on November 17, 2011: Authorization to Submit FY’13 County Operating Budget – The following resolution was approved.

RESOLUTION: 11-100 RE: Ratification of Action Taken in

Budget, Finance and Audit Committee on November 17, 2011: Authorization to Submit FY’13 County Operating Budget

WHEREAS, the Housing Opportunities Commission (HOC) of Montgomery

County was required to submit a request for County funds for FY’13; and

WHEREAS, the County had instructed HOC to submit a base budget or “MARC” of $5,583,230 for FY’13 by November 22, 2011; and

WHEREAS, since the budget submission was due to the County by November

22, 2011, the Budget, Finance and Audit Committee reviewed and approved the submission of the FY’13 County Operating Budget at the November 17, 2011 meeting.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities

Commission of Montgomery County that it hereby ratifies the action taken by the Budget, Finance and Audit Committee authorizing the submission of the FY’13 County Operating Budget of $5,583,230.

C. Approval of New Participating Lender for the Single Family Mortgage Purchase Program – The following resolution was approved.

RESOLUTION: 11-101 RE: Approval of New Participating

Lender for the Single Family Mortgage Purchase Program

WHEREAS, the Housing Opportunities Commission of Montgomery County

approves lenders to participate in the Mortgage Purchase Program; and

WHEREAS, such participation is continuous and for multiple programs; and

WHEREAS, the Commission has approved an ongoing process for adding new lenders to the Mortgage Purchase Program; and

WHEREAS, Real Estate Mortgage Network, Inc. has applied for participation in the Mortgage Purchase Program; and

WHEREAS, Real Estate Mortgage Network, Inc. has satisfied the required criteria for admittance to the Mortgage Purchase Program.


NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that Real Estate Mortgage Network, Inc. is approved for participation in the Mortgage Purchase Program, effective immediately.

D. Approval of Maryland State Highway Administration Right of Way Easement at Sandy Spring Meadow – The following resolution was approved.

RESOLUTION: 11-102 RE: Approval of Maryland State

Highway Administration Right of Way Easement at Sandy Spring Meadow

WHEREAS, the State Highway Administration (“SHA”) has requested that the owner of Sandy Spring Meadows execute a right-of way agreement to facilitate the installation of a public sidewalk. WHEREAS, Sandy Spring Meadows is owned by the Housing Opportunities Commission (“HOC”) WHEREAS, HOC wishes to authorize the Executive Director or his designee to execute a right-of-way agreement between HOC and SHA. WHEREAS, SHA will pay HOC $100 for temporary right of way. NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission that the Executive Director or his designee is hereby authorized to execute a right-of-way agreement between the Housing Opportunities Commission, State Highway Administration.

E. Adoption of Retirement Resolution for Richard “Pete” Weir – The

following resolution was approved. RESOLUTION: 11-103 RE: Adoption of Retirement

Resolution for Richard “Pete” Weir

WHEREAS, the Housing Opportunities Commission acknowledges Richard

“Pete” Weir, Lead Trades Maintenance Worker in the Housing Management Division, for more than 21 years of dedicated service to the Agency and the citizens of Montgomery County; and

WHEREAS, in January 1990, Pete joined the Scattered Sites team assigned to the Upper County Facilities Office as a Trades Maintenance Worker II; and

WHEREAS, Pete was promoted to Lead Trades Maintenance Worker in October 2006. He completed work orders in preventive maintenance and unit rehabilitation with


quality workmanship and performed his daily tasks with diligence and responsiveness; and

WHEREAS, Pete was recognized as HOC’s premier appliance mechanic. He gave sound advice and instruction on how to perform certain repairs, and he provided excellent customer service to HOC residents; and

WHEREAS, Pete was also recognized as being a good team worker and for his willingness to help others in the field; and

WHEREAS, Pete earned numerous awards over the years including a Letter of Appreciation in 1990 for his team spirit and quality performance in the completion of the Upper County Facilities office renovation, a Special Project Award in 1992 for his contribution to a 2-year experimental Scattered Sites project, and an Employee Award in 1994 in recognition of his initiative to pursue training in appliance repair which reduced the cost of repairs to equipment and eliminated several appliance replacements.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County extends its sincere thanks and appreciation to Richard “Pete” Weir for his many years of commitment and dedication and wishes him happiness and good health in his retirement.

F. Adoption of Retirement Resolution for Betty McCollum-Tate – The following resolution was approved.

RESOLUTION: 11-104 RE: Adoption of Retirement

Resolution for Betty McCollum-Tate

WHEREAS, the Housing Opportunities Commission of Montgomery County is

indebted to Betty McCollum-Tate, Resident Counselor III, for over 12 years of dedicated service to the Agency and the citizens of Montgomery County; and

WHEREAS, on May 10, 1999, Betty joined the staff of the Resident Services Division as a Resident Counselor III with the Supportive Housing Program, providing supportive services to homeless and disabled individuals and their families; and

WHEREAS, Betty provided vocational and employment counseling to transitional housing clients in the McKinney programs. This included career assessment, job readiness activities, training, job coaching, resume writing, and job leads and referrals for supportive services; and

WHEREAS, Betty is known for her professional, caring assistance in helping clients to resolve issues and encouraged resourcefulness. She was instrumental in helping HOC’s first McKinney program participant purchase their own home; and


WHEREAS, in December 2000, Betty was recognized for her outstanding contribution to the Supportive Housing Program by leading a well-organized and successful effort to provide comprehensive computer training and equipment to program participants. She worked closely with training consultants to design effective training programs, certifications and related achievement awards; and

WHEREAS, Betty contributed immeasurably in fostering HOC’s and the Resident Services Division’s reputation for delivering exemplary services to vulnerable populations.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that it extends its sincere thanks and appreciation for Betty’s contributions to HOC and its residents and wishes her health and happiness in her retirement.

II. INFORMATION EXCHANGE A. Report of the Acting Executive Director – Mr. Robinson expanded on a

number of items in his written report. The following items were provided verbally: • Mr. Robinson thanked the Commission for the opportunity to serve as the

Acting Executive Director over the past months. He thinks very highly of this organization and looks forward to supporting Mr. Spann and HOC’s mission.

• The Area Median Income for the Washington area increased from $106,100 to $107,500. There was also a similar increase in the extremely low-level income qualification. This allows more households to qualify.

• HUD has designated HOC as a high performer. • HOC has received 67 vouchers as a result of the Cinnamon Run property

opting out of the project-based program. HOC will assist the families affected with tenant based vouchers.

• The Treasury is extending the New Issue Bond Program (NIBP) by one year. It will now expire in December 2012. This extension will allow HOC to use it remaining $13 million for a bond issue in 2012. The Treasury also extended the Temporary Credit and Liquidity Program (TCLP) to 2015.

• HOC will administer a Supportive Youth Housing Program grant awarded to Community Partners, HOC’s non-profit partner. This one year grant in the amount of $150,000 was issued by Freddie Mac for this program. This is the largest grant that Community Partners has received. It will provide intensive case management for 11 children who are aging out of the foster care program.

• HUD has looked at HOC’s application for the conversion of Public Housing units to vouchers. HUD had a number of follow-up questions and HOC will respond quickly. Once a positive response is received from HUD, we would be going forward to request the one-for-one voucher transfer that is


the most competitive area. If we are successful, during year one HOC will complete 390 transfers, 140 in year two and 139 in year three.

B. Commissioner Exchange

• Chair Piñero acknowledged the tremendous job Jerry Robinson performed

as Acting Executive Director since February 2011. Mr. Robinson will be returning to his previous position as Director of Housing Management in 2012 when the new Executive Director Stacy Spann begins his assignment.

C. Community Forum

• Joann Nickles, a Housing Choice Voucher participant, addressed the

Commission regarding affordable housing in Montgomery County. Ms. Nickles had previously met with Les Kaplan, Director of Resident Services, to discuss the need for additional special needs services, especially those programs that are weak. The Commission is eager to hear what programs and suggestions Ms. Nickles can provide to the Commission for consideration. Ms. Nickles will present a follow-up report at a later date.

• Manny Hidalgo, Executive Director, Latino Economic Development

Corporation (LEDC), and Greg Kearley, Board Chair, LEDC, addressed the Commission regarding their organization and ways in which it would help the community through small business development, affordable housing preservation and homeownership counseling. The management staff at LEDC is interested in moving their operations to the vacant retail space at MetroPointe. Due to the high cost of the build-out, Mr. Hidalgo stated he has received verbal support of MD/DC Business First program, Citicorp and Maryland Secretary of Housing and Community Development Secretary Skinner. This space would allow for LEDC’s small business development staff to be combined and space for growth. Mr. Hidalgo reviewed the terms of a potential 10 year lease through graduated rent, and offering new terms not previously discussed with staff. A PowerPoint presentation was made by Mr. Kearley showing the layout of office space should the HOC enter into a lease agreement with LEDC. Chair Piñero appreciated the information that was provided and Jim Miller, Acting Director, Asset Management & Modernization, and Peter Desjardins, Asset Manager, followed LEDC’s presentation with information on another business interested in leasing the retail space at MetroPointe.


The second application for the space was from LG Family Dental for a 10 year lease. There is a projected deficit of $2.4 million over the next ten years at MetroPointe. Assumptions were made in the projections regarding the leasing of the retail space before either of the current offers were made. When comparing the two potential leases, the offer made by LG Family Dental would reduce the projected deficit by $125,413 and the original LEDC offer would increase the projected deficit by $150,316, the difference being $275,000. The Commission has asked Mr. Miller to recalculate the financials given the new terms offered by LEDC and the new calculations will be discussed during a conference call.

III. COMMITTEE REPORTS and RECOMMENDATIONS FOR ACTION A. Legislative and Regulatory Committee – Vice Chair Roman

1. Adoption of Revisions to the Housing Choice Voucher

Administrative Plan and Public Housing Admissions and Continued Occupancy Policy (ACOP) to Address Age Eligibility for Application and Immigration Status, HQS Inspections and Rent Reasonableness, and Revisions to the Enterprise Income Verification Policy (EIV)

Joy Flood, Director of Housing Resources, and Doug Ryan, Assistant Director of

Federal Programs, provided an overview of the proposed changes to the Housing Choice Voucher Administrative Plan and the ACOP. The Resident Advisory Board reviewed each change and they have requested that the verification of childcare expenses be revisited at another time.

The eligibility for immigration status determines who is eligible in the family based

on their immigration status. Often times, these families are no longer eligible for housing due to the prorated calculations of the subsidy and the household would be paying more than 40% of their income in rent causing the ineligibility. The Housing Quality Inspections change would only change the protocol for the voucher program. The inspection must still be in the compliance window. The Rent Reasonableness portion of the revisions codifies HOC’s use of an outside vendor to perform this function.

The following resolution was adopted upon a motion by Vice Chair Roman and

seconded by Commissioner Lindstrom. Affirmative votes were cast by Commissioners Piñero, Roman, Banks, Edson, and Lindstrom. Chair Pro Tem Kator was temporarily away and did not participate in the vote. Commissioner Wiencek was necessarily absent and did not participate in the vote.


RESOLUTION: 11-105 RE: Adoption of Revisions to the Housing Choice Voucher Administrative Plan and Public Housing Admissions and Continued Occupancy Policy (ACOP) to Address Age Eligibility for Application and Immigration Status, HQS Inspections and Rent Reasonableness, and Revisions to the Enterprise Income Verification Policy (EIV)

WHEREAS, federal statutes and regulations require housing providers to adopt certain policies and permit flexibility in others; and WHEREAS, the Housing Opportunities Commission aims to ensure fair and equitable treatment of applicants and residents in its housing programs; and WHEREAS, the Housing Opportunities Commission aims to ensure the efficient use of its housing programs resources; and WHEREAS, the revisions address the following program areas: verifications, immigration status, HQS inspections and rent reasonableness, and the EIV policy. NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that it adopts revisions to the Housing Choice Voucher Administrative Plan and the Public Housing Admissions and Continued Occupancy Policy (ACOP) to address age eligibility for application, verification of immigration status, HQS inspections and rent reasonableness, and revisions to the Enterprise Income Verification Policy (EIV).

B. Development and Finance Committee – Commissioner Lindstrom

1. Amendment to Procurement Policy: Selection of Architects, General

Contractors and Development Consultants

Maryann Dillon, Director of Real Estate, and Bill Anderson, Procurement Officer, explained that this action waives the formal bid procedure to select a general contractor. The amendment to the Procurement Policy would include seeking a single design-build contractor by approaching several firms with this expertise. It would allow an expedited construction of the community room.

The following resolution was adopted upon a motion by Commissioner Lindstrom

and seconded by Commissioner Edson. Affirmative votes were cast by Commissioners Piñero, Roman, Banks, Edson, and Lindstrom. Chair Pro Tem Kator was temporarily away and did not participate in the vote. Commissioner Wiencek was necessarily absent and did not participate in the vote. Attachment 1 was amended.


RESOLUTION: 11-106 RE: Amendment to Procurement Policy: Selection of Architects, General Contractors and Development Consultants

WHEREAS, the Housing Opportunities Commission of Montgomery County, as a

public agency, has an approved Procurement Policy guiding the procurement of goods and services that ensures that all contracts, procurements, bidding and selection of contractors is conducted in a manner that ensures fairness and competitive pricing; and

WHEREAS, for specific development projects, the standard method of procurement in the Policy requires that staff issue Requests for Proposals with complete scopes of work so that architects, engineers and general contractors may submit proposals with complete and fixed pricing; and

WHEREAS, there are times when this requirement results in project delays,

changes in the design team and less than optimal pricing; and

WHEREAS, an amendment to the Procurement Policy has been proposed that would allow the Commission to engage such consultants and contractors earlier in the development process by creating a pre-qualified list of consultants and contractors to be solicited for services for certain projects under certain circumstances.


Commission of Montgomery County that the HOC Procurement Policy is amended by inserting new paragraphs K, L and M to Section III of the Procurement Policy regarding the selection of engineers, architects, land planners and general contractors to read as stated on Attachment 1, which is hereby incorporated into this Resolution.

2. Authorization to Increase Scope of Work at Magruder’s Discovery to Construct a Community Room and to Waive Formal Bid Procedure for Selection of Contractor

Maryann Dillon, Director of Real Estate, and Andrew Zaleski, Housing

Acquisitions Manager, made a brief presentation regarding the construction of a community room at Magruder’s Discovery. There is approximately $338,429 in surplus bond funds with which the construction would be funded. The community room is a much needed asset to the property for the residents and property management staff.


and seconded by Vice Chair Roman. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote.


RESOLUTION: 11-107 RE: Authorization to Increase Scope of Work at Magruder’s Discovery to Construct a Community Room and to Waive Formal Bid Procedure for Selection of a Contractor

WHEREAS, the Commission approved a development plan for the renovation of

Magruder’s Discovery, a 134-unit apartment community (the “Property”), funded by taxexempt bonds; and

WHEREAS, the Property was transferred to Magruder’s Discovery Development Corporation (the “Corporation”) by the Commission; and

WHEREAS, the Commission and the Corporation entered into an Asset Management Agreement giving the Commission authority to manage, supervise construction and operate the Property; and

WHEREAS, the renovation has been substantially completed; and

WHEREAS, as a result of project savings, surplus bond funds remain; and

WHEREAS, the Commission recognizes the Property’s need for a community room; and

WHEREAS, the Commission is authorized by the Asset Management Agreement to expend funds that benefit the Property and its residents; and

WHEREAS, in order to expedite the construction of the community room, formal bid procedures may be waived.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission that the Acting Executive Director is authorized to enter into a contract or contracts not to exceed in total $200,000 to construct a community room at Magruder’s Discovery; and

BE IT FURTHER RESOLVED that the Acting Executive Director is authorized to

waive the agency’s formal bid procedures when procuring a contractor to construct the community room in order to expedite its completion.

3. Approval of Preliminary Development Plan for Ambassador Apartments

Maryann Dillon, Director of Real Estate, and Jennifer Arrington, Housing Acquisitions Manager, addressed the Commission regarding the preliminary development plan for the Ambassador Apartments. Ms. Arrington explained the development plan being presented preserves public purpose. All interior and exterior residential components are expected to be $$69,000 per unit which will add approximately 20 years of useful life to the current structure. This would increase the


property’s ability to support a 30 year tax exempt mortgage of $11 million and will allow the property to raise approximately $6.5 million in equity through the re-syndication of 4% low income housing tax credits.

Commissioner Lindstrom, Chair, Development and Finance Committee, stated

the committee was hopeful that the entire property, a condominium with residential and commercial components, could be redeveloped. The committee’s long-term preference was redeveloping the site in its entirety.

There was discussion regarding the commercial condominium portion of the

property owned adjacent to The Ambassador. If this property was sold to HOC, it would provide more development options for the entire site.

Vice Chair Roman noted for the record that the Commission would like to have

this site redeveloped within the next 20 years to 25 years. The Ambassador would be syndicated with 4% tax credits and an extended use agreement, which renews the 15-year tax credit compliance period for another 15 years. This would be necessary to renegotiate with the State if HOC were to redevelop the site prior to the compliance period ending. Commissioner Edson noted that a 9% tax credit situation would lead to 40 years of restrictions on the property. There is the possibility of negotiating with the State after 15 years for replacement housing.


and seconded by Commissioner Edson. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote.

RESOLUTION: 11-108 RE: Approval of Preliminary

Development Plan for Ambassador Apartments

WHEREAS, Ambassador Apartments (the “Property”) consist of 162 apartments

that are 100% income restricted within the residential component of a seven-story high rise mixed-use condominium located in Wheaton; and

WHEREAS, the Property is owned by a tax credit limited partnership called Wheaton-University Boulevard Limited Partnership (WUBLP); and

WHEREAS, in 2005, the Housing Opportunities Commission (HOC) acquired the 1% general partnership interest in WUBLP through HOC Ambassador, Inc., a stock corporation whose stock is wholly owned by HOC; and

WHEREAS, in July 2010, M&T Bank, the 99% limited partner in WUBLP, donated its interest in WUBLP to the Commission; and

WHEREAS, there has been no major renovation to the building, originally constructed in 1959, since its conversion from a hotel to residential units in 1992; and


WHEREAS, the Commission approved pre-development funds to develop a viable scope of work and development plan that will meet the property’s immediate and long term physical needs and to determine the feasibility of constructing additional residential units on the Property; and

WHEREAS, pre-development findings concluded that the cost to construct additional residential units would be cost prohibitive and that renovating the existing property is the most viable option.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that it approves the Preliminary Development Plan proposal for The Ambassador Apartments to renovate substantially the portion of the existing building and garage owned by WUBLP by re-syndicating the Property using tax-exempt bonds and 4% Low Income Housing Tax Credits, renegotiating the terms of some current debt and identifying new sources of funds necessary to complete the Development Plan.

BE IT FURTHER RESOLVED that both the selection of development team consultants and the final development plan, once a financially viable plan is developed which reduces any financing gap to the fullest extent possible, are to be presented to the Commission for consideration and final approval.

4. Approval of Amendments to the 1979 Single Family Mortgage Revenue Bond Resolution

Kayrine Brown, Director of Mortgage Finance, and Tom DeBrine, Manager,

Single Family Programs made a presentation regarding the 1979 Single Family Mortgage Revenue Bonds. It is not uncommon that amendments need to be made from time to time. At the advice of HOC’s financial counsel, various areas have been identified. For the amendments requiring bondholder consent it will take effect upon the approval of two-thirds of the bondholders, likely over the next three or four years. Changes to amendments that do not require bondholder consent will take effect immediately.

Mr. DeBrine brought attention to Attachment 1 and Attachment 2 which shows

the amendments and current resolution and proposed changes. He highlighted the Debt Service Reserve Requirement from the current 10% of outstanding bonds to 3% of outstanding bonds. Another amendment relates to the current requirement of pool insurance which is 10% of the original aggregate principal of all conventional loans in bond issue. The proposed change would eliminate the 10% requirement.


and seconded by Vice Chair Roman. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote.


RESOLUTION: 11-109 RE: Amendment to Resolution Providing for the Issuance of Single Family Mortgage Revenue Bonds, adopted March 28, 1979, as amended

Due to its length, the text of the Resolution is not included in the minutes. A complete copy of the Resolution is on file in the Office of the Commission.


and seconded by Commissioner Edson. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote. RESOLUTION: 11-110 RE: Amendment to Resolution

Providing for the Issuance of Single Family Mortgage Revenue Bonds, adopted March 28, 1979, as amended

Due to its length, the text of the Resolution is not included in the minutes.

A complete copy of the Resolution is on file in the Office of the Commission.

C. Budget, Finance and Audit Committee – Chair Pro Tem Kator 1. Acceptance of First Quarter FY’12 Budget to Actual Statements

Gail Willison, Chief Financial Officer, and Terri Fowler, Budget Officer, made a

brief presentation regarding the first quarter status of the General Fund, Public Housing, Opportunity Housing and the Housing Choice Voucher program.

The following resolution was adopted upon a motion by Chair Pro Tem Kator and

seconded by Vice Chair Roman. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote.

RESOLUTION: 11-111 RE: Acceptance of First Quarter

FY’12 Budget to Actual Statements

WHEREAS, the budget policy for the Housing Opportunities Commission of Montgomery County states that quarterly budget to actual statements will be reviewed by the Commission; and WHEREAS, the Commission reviewed the First Quarter FY’12 Budget to Actual Statements during its December 7, 2011 meeting.


NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that it hereby accepts the First Quarter FY’12 Budget to Actual Statements.

2. Approval of FY’12 First Quarter Budget Amendment

Gail Willison, Chief Financial Officer, and Terri Fowler, Budget Officer, made a brief presentation. Incorporated into this budget is the Other Post Employment Benefit (OPEB) which was previously authorized by the Commission. Additionally, the Preservation Coordinators grant funded by the County has been absorbed into the HOC budget.

The following resolution was adopted upon a motion by Chair Pro Tem Kator and seconded by Vice Chair Roman. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote. RESOLUTION: 11-112 RE: Approval of FY’12 First Quarter Budget Amendment

WHEREAS, the Housing Opportunities Commission adopted a budget for FY’12 on June 1, 2011; and

WHEREAS, the Commission’s Budget Policy allows for amendments to the

budget; and WHEREAS, the Commission has reviewed several proposed budget

amendments to the FY’12 Budget; and WHEREAS, the net effect of the FY’12 First Budget Amendment is a surplus of

$80,360 which will be restricted to establish a property contingency to address shortfalls in anticipated property cash flow thus returning to a balanced budget.


Commission of Montgomery County that it hereby amends the FY’12 Operating Budget by increasing total revenues and expenses for the Agency from $218.0 million to $220.1 million.

BE IT ALSO RESOLVED that the Housing Opportunities Commission of Montgomery County hereby amends the FY’12 Capital Budget by increasing revenues and expenses for the Agency from $16.0 million to $17.7 million.

3. Approval of CY’11 Third Quarter Budget Amendment

Gail Willison, Chief Financial Officer, and Terri Fowler, Budget Officer, made a brief presentation regarding the loss of the Preservation Coordinators County grant and funding those positions through the appropriate Limited Partnership budgets.



seconded by Vice Chair Roman. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote. RESOLUTION: 11-113 RE: Approval of CY’11 Third

Quarter Budget Amendment

WHEREAS, the Housing Opportunities Commission ratified CY’11 Budgets for Shady Grove Apartments LP, The Willows of Gaithersburg Associates LP, MV Affordable Housing Associates LP (Stewartown), Georgian Court Silver Spring LP, Barclay One Associates LP, Forest Oak Towers LP and Wheaton Metro LP (MetroPointe) on November 3, 2010; and

WHEREAS, the Commission’s Budget Policy allows for amendments to the

budget; and WHEREAS, the Commission has reviewed several proposed budget

amendments to the CY’11 Budgets for Shady Grove Apartments LP, The Willows of Gaithersburg Associates LP, MV Affordable Housing Associates LP (Stewartown), Georgian Court Silver Spring LP, Barclay One Associates LP, Forest Oak Towers LP and Wheaton Metro LP (MetroPointe).


Commission of Montgomery County that it hereby amends the CY’11 budgets for Shady Grove Apartments LP, The Willows of Gaithersburg Associates LP, MV Affordable Housing Associates LP (Stewartown), Georgian Court Silver Spring LP, Barclay One Associates LP, Forest Oak Towers LP and Wheaton Metro LP (MetroPointe).

4. Approval to Extend the Banking Services Contract and Line of Credit Agreement with PNC Bank

Gail Willison, Chief Financial Officer, and Cornelia Kent, Assistant Chief Financial

Officer, addressed the Commission. HOC’s initial four-year Banking Services Contract with PNC Bank expires on May

31, 2012. HOC has the option of extending the contact two additional times for two years each. PNC Bank has agreed to extend the contract through May 31, 2014 with the same terms as the current contract.




RESOLUTION: 11-114 RE: Approval to Extend the Banking Services Contract and Line Credit Agreement with PNC Bank

WHEREAS, HOC currently maintains a Line of Credit Agreement with PNC Bank

with an authorized amount of $50 million and borrows at the taxable rate of one month, three month, six month or twelve month LIBOR plus 90 basis points or at the tax exempt rate at 60% of the Prime Rate; and

WHEREAS, HOC’s initial four year Banking Services Contract with PNC Bank

expires on May 31, 2012; and WHEREAS, HOC has the option of extending the contract with PNC Bank two

additional times for two years each, not to exceed eight years in total; and WHEREAS, PNC Bank has agreed to extend the Banking Services Contract for a period of two years through May 31, 2014 at the current pricing level; and

WHEREAS, PNC Bank has agreed to maintain the current authorized amount of $50 million as well as the current pricing of LIBOR plus 90 basis points for taxable borrowings or 60% of the Prime Rate for tax-exempt borrowings for an additional two years through June 29, 2014.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that the Acting Executive Director is authorized to extend the Banking Services Contract and Line of Credit Agreement with PNC Bank at the current pricing levels for a period of two years, through May 31, 2014 and June 29, 2014, respectively.

5. Authorization to Retire the Paddington Square Real Estate Mortgage Investment Conduit (REMIC) Loan with Prudential using HOC Line of Credit with PNC Bank

Gail Willison, Chief Financial Officer, addressed the Commission on borrowing

from the Line of Credit with PNC Bank to retire the Paddington Square loan. The following resolution was adopted upon a motion by Chair Pro Tem Kator and

seconded by Vice Chair Roman. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, and Edson. Commissioner Lindstrom was temporarily away and did not participate in the vote. Commissioner Wiencek was necessarily absent and did not participate in the vote.


RESOLUTION: 11-115 RE: Authorization to Retire the Paddington Square Real Estate Mortgage Investment Conduit (REMIC) Loan with Prudential using HOC Line of Credit with PNC Bank

WHEREAS, in 2004, HOC acquired a 166-unit garden style apartment

community consisting of 155 two-bedroom (one unit used as the rental office) and 11 three-bedroom apartments located in Silver Spring, Maryland known as the Paddington Square Apartments; and

WHEREAS, HOC has utilized several funding sources including a Prudential Real Estate Mortgage Conduit (REMIC) loan (the “REMIC Loan”) in connection with the acquisition and renovation of the Paddington Square Apartments; and

WHEREAS, the REMIC Loan in the amount of up to $6,667,929 is due and payable in full on January 2, 2012; and

WHEREAS, staff has consulted with and been advised by Bond Counsel that in order to preserve HOC’s ability to issue tax exempt governmental bonds for the long term financing of the Paddington Square Apartments, HOC must pay off the REMIC Loan with an outside funding source (using non Commission funds such as the HOC Line of Credit with PNC Bank); and

WHEREAS, staff recommends retiring the REMIC Loan in an amount of up to $6,667,929 (subject to final pay off amount) with a loan from the HOC Line of Credit with PNC Bank (the “PNC Bank Loan”); and

WHEREAS, staff anticipates that the PNC Bank Loan will be outstanding for a period of time not to exceed 18 months at an interest rate per annum of Libor plus 90 basis points; and

WHEREAS, the staff further anticipates that the PNC Bank Loan will be retired with long term financing of the property, through the issuance of tax exempt governmental bonds, which is expected to occur in 2013.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County:

1. The PNC Bank Loan to be funded from a draw of up to $6,667,929 on the

PNC Bank, N.A. Line of Credit for the purpose of retiring the outstanding REMIC Loan and having a term of approximately 18 months is hereby approved.

2. The Chairman, the Vice Chairman, the Chairman Pro Tem, the Acting Executive Director or other authorized representative of the Commission is


hereby authorized and directed to execute and deliver any and all documents and instruments necessary or proper to do and cause to be done any and all acts and things necessary or proper for accomplishing the transactions contemplated by this Resolution with respect to the financing of the PNC Bank Loan and the retiring of the REMIC Loan.

6. Authorization to Retire Paint Branch Loan Using the Opportunity

Housing Reserve Fund (OHRF) Gail Willison, Chief Financial Officer, explained the Limited Partnership has

contacted HOC regarding prepaying the note without penalty. If agreed by the Commission, funding would be borrowed from the OHRF and repaid over three years and, at the end of each fiscal year, evaluated to determine if there is cash flow available to pay simple interest of 5% to the OHRF.


seconded by Commissioner Edson. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote. RESOLUTION: 11-116 RE: Authorization to Retire Paint

Branch Loan Using the Opportunity Housing Reserve Fund (OHRF)

WHEREAS, HOC borrowed $508,500 in May of 1981 from The Columbia Towers Limited Partnership to finance the cost of acquiring 14 condominium units in the “Paint Branch Park Condominium” located in Montgomery County Maryland currently known as Paint Branch; and WHEREAS, HOC was contacted by Arthur Brisker, attorney for Columbia Towers Limited Partnership, inquiring as to whether HOC would be interested in prepaying the note without penalty; and WHEREAS, staff recommends retiring the Paint Branch note with The Columbia Towers Limited Partnership in an amount not to exceed $95,630 using the Opportunity Housing Reserve Fund (OHRF); and WHEREAS, the loan from the OHRF will be for three years with payments starting January 2012 and ending December 2014; and WHEREAS, staff will prepare an analysis at the end of each fiscal year that the debt is outstanding to determine if sufficient cash flow is available to pay simple interest of 5% to the OHRF.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that the Paint Branch note with The Columbia


Towers Limited Partnership be retired in an amount not to exceed $95,630 using the Opportunity Housing Reserve Fund (OHRF).

IV. ITEMS REQUIRING DELIBERATION and/or ACTION

A. Authorization to Draw $2,640,000 from the PNC Bank, N.A. Line of Credit to Refund and Redeem Single Family Bonds

Kayrine Brown, Director of Mortgage Finance, and Tom DeBrine, Manager,

Single Family Programs, addressed the Commission stating the Single Family Program anticipates a bond redemption. The program has proceeds from both repayments and prepayments of mortgage loans. Some of the prepayments must be used to redeem bonds under the 10 Year Rule and other repayments can be used and recycled back into the program. If tax exempt bonds are redeemed with prepayments, the capital is lost. The unused taxable bond funds will be $4.685 million in the redemption. There is no volume cap associated with taxable bonds so there is no concern of losing volume cap by redeeming bond proceeds and the taxable bond redemption will reduce negative arbitrage and costs of liquidly and remarketing. It is more practicable to redeem the bonds since the interest rate charged for mortgages would be uncompetitive.

The proposal is to use the Line of Credit to redeem $2.640 million in bonds.

This amount will also be held in the Revenue Bonds Single Family program as collateral in the event there is a need to pay the Line of Credit. The Line of Credit will be repaid when an anticipated bond issue in 2012 takes place.



RESOLUTION: 11-117 RE: Authorization to Draw

$2,640,000 from the PNC Bank, N.A. Line of Credit to Refund and Redeem Single Family Bonds

WHEREAS, the Housing Opportunities Commission of Montgomery County (the

“Commission”) is a public body corporate and politic duly organized under Division II of the Housing and Community Development Article of the Annotated Code of Maryland, as amended, known as the Housing Authorities Law, and the Agreement by and between the Housing Opportunities Commission of Montgomery County and Montgomery County, Maryland (the “County”), effective July 1, 2010, as amended (together, the “Act”), and authorized thereby to issue its notes and bonds from time to time to fulfill its corporate purposes; and

WHEREAS, pursuant to its authority, the Commission has utilized the practice of

issuing refunding bonds in the Single Family Mortgage Purchase Program (the


“Program”) to recycle and extend the life of volume cap it allocates to each bond issue and to refinance its outstanding bond debt at lower interest rates, thereby, minimizing negative arbitrage expenses to the Program; and

WHEREAS, the ability to recycle volume cap is facilitated by reserving mortgage

principal repayments and prepayments to make new mortgage loans and using the proceeds of a new bond issue to refund and redeem the prior outstanding bonds associated with the mortgage principal repayments and prepayments; and

WHEREAS, the IRS imposes certain restrictions on the ability to recycle

indefinitely the allocated volume cap through statutory provisions and regulations, one of which is the 10-year Rule which became effective in 1988; and

WHEREAS, the Commission currently has received $4,780,000 in mortgage principal repayments and prepayments of which all but $2,640,000 must be used to redeem bonds pursuant to the 10-year Rule ($2,170,000); and

WHEREAS, in addition to received prepayments and repayments, there remains $4,685,000 of taxable funds in the 2007 Series E Mortgage Loan Account which is impractical to be used to make mortgage loans in the Program and which will be combined with the prepayments and repayments to complete a bond redemption of $9,465,000; and

WHEREAS, a loan of $2,640,000 is being requested from the PNC Bank, N.A.

Line of Credit (“LOC”) to be used to refund and redeem the prior outstanding bonds for which mortgage principal repayments and prepayments in an equal amount have been received under the Program, thereby, allowing $2,640,000 to be recycled into new mortgage loans, preserve the associated volume cap, and minimize negative arbitrage cost to the Single Family Program.

NOW THEREFORE, BE IT RESOLVED by the Housing Opportunities

Commission of Montgomery County that a draw of $2,640,000 from the PNC Bank, N.A. Line of Credit as a loan to the Single Family Mortgage Purchase Program for use to refund and redeem outstanding single family bonds on December 14, 2011 is approved. The loan will accrue and pay interest at the current contract rate on the LOC of LIBOR + 90 basis points and is expected to be outstanding for the earlier of the next single family bond issue and approximately 12 months

B. Adoption of a Bond Authorizing Resolution for the MetroPointe Apartments Transaction

Kayrine Brown, Director of Mortgage Finance, and Vivian Benjamin, Deputy

Director of Mortgage Finance, addressed the Commission regarding the permanent financing for MetroPointe. This authorization would allow the issuance of $36,605,000 in combination of tax exempt and taxable bonds. This resolution will also approve an increase in the cost of issuance for the development.


The proceeds from this transaction will be used to retire the bonds that were issued under the General Obligation that are due on January 1, 2012 and any additional proceeds will be used toward repaying the PNC Line of Credit. Chair Pro Tem Kator asked about this transaction being a swap and not a cap. Ms. Brown responded that at the time, due to increases in construction costs, it was prudent to finance this transaction at the lowest rate possible. The best structure to achieve the financing at the time was for HOC to enter into a 40-year swap agreement. Part of that swap allows us to opt out at the 15-year mark or 2023 which is compatible within the 15 year tax credit compliance. It is our desire to opt out and refinance it.


seconded by Commissioner Edson. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote.

RESOLUTION NO: 11-118 RE: Adoption of a Resolution

Authorizing the Issuance and Sale of Multifamily Housing Development Bonds 2011 Series A and 2011 Series B to Refinance the MetroPointe Development

Due to its length, the text of the Resolution is not included in the minutes. A complete

copy of the Resolution is on file in the Office of the Commission.

V. NEW BUSINESS

A. Approval of the FY’13 County Operating Budget MARC Reduction Terri Fowler, Budget Officer, addressed the Commission regarding the County’s

request for HOC to submit a FY’13 County Operating Budget MARC Reduction of one percent. HOC’s budget is in the early stages of development and with the Commission’s approval, HOC will submit the FY’13 County Operating Budget MARC Reduction to OMB by December 22, 2011 and details will be provided to the County at a later date.

The following resolution was adopted upon a motion by Vice Chair Roman and

seconded by Commissioner Edson. Affirmative votes were cast by Commissioners Piñero, Roman, Kator, Banks, Edson, and Lindstrom. Commissioner Wiencek was necessarily absent and did not participate in the vote.

RESOLUTION: 11-119 RE: Approval of the FY’13 County

Operating Budget MARC Reduction


WHEREAS, the Housing Opportunities Commission of Montgomery County has to submit a County Operating Budget MARC Reduction for FY’13; and WHEREAS, the County has requested HOC to submit a proposed MARC Reduction of one percent of the County’s FY’13 contribution to HOC or $55,138 for FY’13.

NOW, THEREFORE, BE IT RESOLVED by the Housing Opportunities Commission of Montgomery County that it hereby approves the submission of the FY’13 County Operating Budget MARC Reduction totaling $55,138 with details provided to the County at a later date.

VI. *FUTURE ACTION ITEMS

Mr. Robinson informed the Commission there are no new future action items at this time.

VII. EXECUTIVE SESSION FINDINGS

It was reported that the item before the Commission for consideration in Executive Session is consultation with legal counsel. Based upon this report and there being no further business to come before this session of the Commission, a motion was made, seconded and unanimously adopted to adjourn.

The meeting adjourned at 6:50 p.m.

Respectfully submitted, Jerry Robinson

Acting Secretary-Treasurer /meh

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