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AHA-2014/07/15ANAHEIM HOUSING AUTHORITY REGULAR MEETING OF JULY 15, 2014 The Anaheim Housing Authority regular meeting was called to order on July 15, 2014 at 5:40 P.M. for a joint public comment session with the Anaheim City Council. The meeting notice, agenda and related materials were duly posted on July 11, 2014. Present: Chairman Tom Tait and Authority Members: Jordan Brandman, Gail Eastman, Lucille Kring and Kris Murray. Staff Present: Paul Emery, Interim City Manager, City Attorney Michael Houston and Secretary Linda Andal ADDITIONS /DELETIONS TO THE AGENDA None PUBLIC COMMENTS: John Lane, Preservation Partners, addressed his comments to Item No. 3, and thanked the city for its support of the issuance of bonds through the Housing Authority to help preserve a senior affordable housing complex, the Village Center Apartments, for the next 55 years. CONSENT CALENDAR: At 7:13 P.M., Chairman Tait removed Item No. 1 from the consent calendar for further discussion. Housing Authority Member Brandman then moved to approve the balance of the consent calendar as presented, seconded by Housing Authority Member Eastman. Roll Call Vote: Ayes — 5: (Chairman Tait and Authority Members: Brandman, Eastman, Kring and Murray). Noes — 0. Motion Carried. AHA177 2. Approve minutes of Housing Authority meeting of June 17, 2014. =ND OF CONSENT: AGR -8297 I. RESOLUTION NO. AHA 2014 -005 A RESOLUTION OF ANAHEIM HOUSING AUTHORITY authorizing formation of a joint powers authority with the City of Anaheim; approving the execution of the Joint Exercise of Powers Agreement; and determining such action is exempt from the Environmental Quality Act (CEQA) pursuant to CEQA guidelines sections 15060 (b)(3), 15378 (b)(4) and 15378 (b)(5) (Anaheim Housing and Public Improvements Authority) (related to Council Item No. 29). John Woodhead, Director of Community Development announced this item was for the approval of a joint exercise of powers agreement between the Housing Authority and the City of Anaheim in order to create a joint powers authority or JPA which would be known as the Anaheim Housing and Public Improvements Authority (AHPIA). He stated that over the last 20 years, the City and the Housing Authority collectively and frequently, in concert with the former Anaheim Redevelopment Agency, helped in the development of over 1,000 affordable housing units in the city. Due to the complexity of issues relating to public assistance and the financing of affordable housing, he stated establishing a JPA per the Joint Exercise of Powers Act, was an effective tool and resource for the city in addressing public assistance /financing matters and to also provide flexibility in others areas that were valuable to the Housing Authority. Each member of the JPA would have the ability to exercise powers common to the City of Anaheim Anaheim Housing Authority Minutes of July 15, 2014 Page 2 and the Housing Authority through this agreement. Mr. Woodhead pointed out the City and the former Redevelopment Agency had previously entered into a joint powers agreement to create the Anaheim Public Financing Authority (APFA) and because the Redevelopment Agency had been dissolved on February 1, 2012, it was to the city's advantage to proceed in conjunction with the Housing Authority to create a new joint powers authority for any new transactions that might otherwise have been undertaken through the APFA. With the creation of this new JPA, the Anaheim Housing and Public Improvements Authority would have the ability to issue revenue bonds to pay the cost and expenses of acquiring or constructing a wide range of municipal improvements. Mr. Woodhead stated on March 11, 2014, Council and the Anaheim Public Financing Authority approved the issuance of up to $300 million in lease revenue bonds to refinance certain completed improvements at lower rates and to provide funding for a proposed 200,000 square foot addition of meeting space plus support space, including the replacement of parking facilities at the Anaheim Convention Center. After this approval was given, the city then executed a bond purchase agreement with Citigroup Global Markets Inc. on March 25, 2014 to proceed with the issuance of lease revenue bonds. Litigation challenging the Anaheim Convention Center financing expansion was subsequently filed on May 12, 2014 with the plaintiffs claiming that the APFA did not have the legal authority to issue lease revenue bonds for the Convention Center project because the Successor to the Redevelopment Agency was limited to winding down the affairs of the former Redevelopment Agency and had no authority to participate in the financing of a new project. Mr. Woodhead reported that due to the pending lawsuit, the APFA bonds were not issued and the city was temporarily left without funding for completion of the Convention Center expansion. He added city staff, the City Attorney's Office, outside litigation counsel and bond counsel all agreed that the plaintiff's claims in the lawsuit concerning the APFA's lack of authority to proceed were without merit, however, it was decided that establishing a long -term replacement for the APFA in light of the dissolution of the Redevelopment Agency and the Housing Authority inheriting the Agency's housing assets, would help with the provision of housing financing in the future as well as the financing necessary for the Convention Center expansion to move forward. Mr. Woodhead indicated staff recommended Council and the Housing Authority governing board approve the formation of and enter into a new joint exercise of powers agreement creating the Anaheim Housing and Public Improvements Authority. Chairman Tait remarked that a few weeks ago, the City Council approved by a 4:1 vote a 200,000 square foot expansion of the Anaheim Convention Center by granting the issuance of bonds which would result in a $15 million annual debt payment for 30 years. The chairman did not believe revenues to be derived from this proposed expansion would come close to paying for the construction and that the construction debt would end up being an obligation of the general fund which would impact those core services provided through general fund revenues. For those reasons, he explained, he voted against the expansion financing and would vote against this proposal as well, emphasizing that a 30 year debt encumbrance of this size was also a matter that should be put before the public for a vote. Authority Member Kring stated she would be endorsing the formation of this JPA, pointing out that the public was required to vote on general obligation bonds, not on revenue bonds as they had a revenue source backing the bonds. She added four years ago the hotels in Garden Grove and Anaheim agreed to increase their transient occupancy tax by two percent, specifically for the expansion of the Anaheim Convention Center and for transportation issues and that this voluntary tax increment increase had paid for the beautification of the Grand Plaza and accrued Anaheim Housing Authority Minutes of July 15, 2014 Page 3 $7 to $8 million each year. In addition, refinancing the bonds would bring in about $11 million annually which meant there was already $15 million per year available to pay back the revenue bonds. She gave emphasis to the fact that when the refinance was approved in March, there was also a $20 million component included in that refinance that would have gone directly into Anaheim's neighborhoods for police, fire, libraries and parks, and when a lawsuit was subsequently filed against the city, that good financing was lost along with the $20 million that would have been earmarked for neighborhoods. Relative to the need for the Convention Center expansion, Ms. Kring remarked the city was in jeopardy of losing revenues associated with NAMM and Natural Products, two large trade shows whose success and continued growth would force them to look for other venues if the Convention Center did not expand, a premise she had confirmed through NAM and Natural Products' spokespersons. She emphasized those two tradeshows and their 170,000 attendees had already put tens of millions of dollars into the city coffers and Anaheim could not afford to lose their business. Authority Member Murray requested staff clarify details of the March 2014 approved Convention Center expansion financing plan with Debbie Moreno, Finance Director, replying there would be no new debt under that plan as the lease payments that would have been made to pay back the revenue bonds, would have been equal to or less than the current lease payments and the financing plan would not have any impact on current or future general fund programs or expenditures. Ms. Moreno added that staff's and the financial consultant's analyses believed the financing plan would only provide additional revenue for future services to the communities. Ms. Murray asked if the $20 million in funding would have been possible because of favorable terms by refinancing the existing debt at higher interest rates and that the cost of expanding the convention center was offset by the cost of the hotelier's assessments or ATID money with Ms. Moreno concurring. Authority Member Murray reiterated the item before Council for consideration was solely for the formation of a Joint Powers Authority. Chairman Tait disagreed with the statement of "no new debt" commenting the Convention Center financing plan would be a new debt of $15 million per year if the city went forward with the plan, even if the older debt obligations were retired and the new debt obligation mirrored the former amount, and that the primary function of the JPA formation was solely for the city to be able to issue new debt for the Convention Center expansion. Ms. Moreno replied the formation of the new Housing and Public Improvement Authority was to fill in for the Anaheim Public Financing Authority after the loss of the former Redevelopment Agency as well as to address financing for revenues bonds. She confirmed that if approved, staff would return to Council with a plan for financing the proposed Convention Center expansion. Chairman Tait reemphasized that he wanted the public to understand that if there were no new room nights resulting from this planned expansion, then the general fund would be obligated to pay the new debt. Ms. Moreno indicated that was correct although the city would be paying no more than it had been currently paying for bond obligations. Authority Member Kring pointed out the existing revenue bonds were issued in 1996 for $500 million and Chairman Tait had voted to approve that financing plan and although times had been tough during the past, the city had never defaulted on one of those payments or needed to use general fund monies and she did not foresee a problem with making the same payment as today for another 30 years especially with an additional 1,500 hotel rooms in the works and two four star hotels a possibility. Referencing the expansion itself, she reiterated that the city could not bear the loss of their two biggest conventions and if Anaheim wanted to remain as one of the top tiered convention venues, this expansion must go forward. Anaheim Housing Authority Minutes of July 15, 2014 Page 4 Authority Member Eastman stated this action was the first step in giving the city the flexibility they lost with the dissolution of the Redevelopment Agency, and she would be supporting its approval. Authority Member Kring moved to approve RESOLUTION NO. AHA 2014 -005 A RESOLUTION OF ANAHEIM HOUSING AUTHORITY authorizing formation of a joint powers authority with the City of Anaheim; approving the execution of the Joint Exercise of Powers Agreement; and determining such action is exempt from the Environmental Quality Act (CEQA) pursuant to CEQA guidelines sections 15060 (b)(3), 15378 (b)(4) and 15378 (b)(5) (Anaheim Housing and Public Improvements Authority); seconded by Authority Member Eastman. Roll Call Vote: Ayes — 4: (Authority Members: Brandman, Eastman, Kring and Murray.) Noes — 1: Chairman Tait. Motion Carried. 3. RESOLUTION NO. AHA 2014 -006 A RESOLUTION OF THE ANAHEIM HOUSING AUTHORITY authorizing the issuance of its Multifamily Housing Revenue notes in an aggregate principal amount not to exceed $15,000,000 for the purpose of financing the B137.1 acquisition, rehabilitation and equipping of the Village Center Apartments Rental Housing Project; approving and authorizing the execution and delivery of any and all documents necessary to issue the notes, complete the transaction and implement the resolution, and ratifying and approving any actions heretofore taken in connection with the notes. Director John Woodhead reported that in 2013, the Housing Authority had received a request from Preservation Partners Development to issue tax exempt bonds to assist in the acquisition, rehabilitation and equipping of a 100 -unit apartment complex located at 200 East Lincoln Avenue known as Village Center Apartments. This January the Housing Authority approved a resolution regarding its intention to issue those tax exempt obligations for the project and the resolution now before the Authority authorized the issuance of up to $15 million of tax exempt housing revenue bonds and to loan the proceeds of the bonds to the developer to finance the Village Center project. He indicated the bond issuance would be a private placement with assurance from Citibank to purchase the bonds which would be ultimately repaid from project revenues with no default risk to the Housing Authority nor to the City if the developer failed to meet its bond repayment obligations. Additionally, he pointed out, the developer acquired project based vouchers from the U.S. Dept. of Housing and Urban Development that would keep Village Center apartments affordable for a 20 year period. The application was filed with the California Debt Allocation committee and an allocation of $15 million was secured for the project, subject to approval by the Authority and the Governing Board with the intention to issue bonds prior to August 2014. Authority Member Brandman moved to approve RESOLUTION NO. AHA 2014 -006 A RESOLUTION OF THE ANAHEIM HOUSING AUTHORITY authorizing the issuance of its Multifamily Housing Revenue notes in an aggregate principal amount not to exceed $15,000,000 for the purpose of financing the acquisition, rehabilitation and equipping of the Village Center Apartments Rental Housing Project; approving and authorizing the execution and delivery of any and all documents necessary to issue the notes, complete the transaction and implement the resolution, and ratifying and approving any actions heretofore taken in connection with the notes; seconded by Authority Member Kring. Roll Call Vote: AYES — 5: (Chairman Tait and Authority Members: Brandman, Eastman, Kring and Murray.) NOES — 0. Motion Carried. Anaheim Housing Authority Minutes of July 15, 2014 Page 5 ADJOURNMENT With no other business to conduct, Chairman Tait recessed the Housing Authority agenda at 7:41 P.M. Re ect b Ily submitted, Linda N. Andal, CMC Secretary, Anaheim Housing Authority