Willington Housing Authority
60 Old Farms Road
September 10, 2012 Meeting Minutes
*** Please note that because of the Columbus Day holiday on Oct. 8, the next WHA meeting is scheduled for Monday, Oct. 15.***
Present: Claudia D’Agata, Don Berg, Laurel Millix, Wilbur Gangaway; financial consultant David Berto; WHA Recording Secretary Brenda Sullivan. Absent: WHA Chairman Robert Campbell
Call to Order – W. Gangaway called the meeting to order at 6:17 p.m.
Present to Speak – No members of the public were present to speak.
Old Business – Button Hill Senior Housing project
D. Berto updated the WHA on communication with Rockville Bank. He said the Federal Home Loan application is due Sept. 28, but it needs to be sent to Rockville Bank before that date. He said Alan Privetelli assigned the WHA project to a Senior VP of Commercial Lending John Cebelius today (Sept. 10, 2012) – he would be the one to approve it, and D. Berto is working with the bank to get the application ready. He also is contacting the management agency, the ACCESS Agency, regarding “points” on services to the elderly. He also said that the application will likely get sustainable development “green” points for services from Crosskey architects.
D. Berto also said that the WHA now has pricing figures from an independent estimator, Don Steadman, so the committee now has the ability to put together a pricing package.
D. Berg reported he has been in contact with the First Selectman (Christina Mailhos) a couple of times regarding required lease and tax documents from the town. He said he was told these documents are now with a town attorney to put them in a form that is signable (i.e, the lease document is about 30 pages) and in as timely a manner as possible – and these documents are modeled after the Willington Woods agreements. He said the tax agreement is a one or two-page letter from the town assessor. D. Berto said the tax document is “not complicated.” He said he asked C. Mailhos more than a month ago for the tax document.
W. Gangaway asked what the latest date is for getting finalized documents from the First Selectman. D. Berto said Monday, Sept. 17, for a final review by D. Berto. He said both documents are very important to the application because they address questions of site control, contributions from the town, cost reductions, etc. – all things that will be important to the people reviewing the application.
D. Berto said now that the WHA has some official costing, these numbers need to be reviewed by Rockville Bank.
Summary of the numbers:
D. Berto said all buildings are just under 20,000 square feet with a total construction cost of about $3.2 million, including all site work – so this equals $160 per square foot. He said the site work is expensive, a lot of grading, etc.
D. Berto said the total project cost comes to $4.16 million, which includes $200,000 construction contingency, $250,000 for design, $100,000 for interest and insurance, $100,000 for legal and environmental work, and $300,000 for the developer’s fee.
D. Berto said WHA will ask for $1.2 million from the State Dept. of Economic and Community Development (DECD); $500,000 in Connecticut tax credits (the upper limit); $372,000 from funds from the town; $400,000 in a grant from Federal Home Loan as well as a $1.6 million loan at 3.5 percent.
D. Berto said Federal Home Loan will give Rockville Bank an ongoing subsidy in order to bring the interest down to 3.5 percent.
D. Berto said total revenue falls $90,000 short of the estimated total costs; the $90,000 could be deferred out of the developer’s fees – with the hope that the WHA doesn’t use the contingency and can get the $90,000 back at the end of the project.
D. Berto said the loan is for 30 years, amortized, with a balloon at 20 years; the loan can be refinanced after 20 years. He said that by amortizing over 30 years, the monthly mortgage payments are lower. That’s the choice you get from Federal Home Loan, he said. And so, a $1.6 million loan would result in an $86,000/yr mortgage payment.
D. Berto discussed estimates of income from renting the units.
He said of the 24 units, ten need to be rented to persons whose income is less than 50 percent of the area median – their rent would then be $800 a month; four of the units would be rented to persons whose income is 60 percent of the area median – they would pay $950 a month; and ten units would be rented to persons whose income is at least 80 percent of the area median – their rent would be $1,150 a month. He noted that rents include utilities.
D. Berto estimated that the area media income for two is about $65,000 a year, so 80 percent of median would be about $50,000 a year (50 percent of median would be about $36,000.) He noted the maximums are higher than at Willington Woods, which are all at 50 percent of the area median income.
He also said the figures re: income requirements do fluctuate over time, but the DECD posts a table online to keep applicants up to date. C. D’Agata asked if a tenant could remain in their unit if their income increased; D. Berto said he believes they could not be kicked out based on income.
There was discussion about the four handicap-accessible units; D. Berto said they’d be offered to any applicant who requires an accessible unit, regardless of where they fall on the income scale, until they are full, so rent for these could range from $800 to $1,150. He also said the figures are averages – tenants who rent a unit with a den, for example, probably would pay slightly more.
D. Berto estimated that based on a 5 percent vacancy rate, income from Button Hill would be about $241,000 a year, operating income to pay for management fees, salaries, utilities, taxes, insurance, the $86,000/yr mortgage payment and setting aside some funds for a replacement reserve.
He estimated this would leave about $14,600 a year in surplus, funds the WHA (as owners) could use to make improvements to Button Hill (i.e. adding a greenhouse as a recreational component) or toward developing another WHA project.
D. Berg asked if tenants might question why the WHA is making a “profit” – instead, why can’t their rents be lower? D. Berto said as a nonprofit, the WHA cannot pay themselves but as owners of the project, they can use the funds for repairs, improvements, etc. C. D’Agata said normally, tenants don’t tell their landlord they object to their rent because the landlord is making too much money.
D. Berto noted the WHA now has access to $175,000 in unused 2008 town sewer-water grant funds (Willington Woods) and $196,000 from a EDI grant (note, this figure is incorrectly stated as $2,008 in the Aug. 13, 2012 WHA minutes).
D. Berto said Federal Home Loan will offer a loan to Rockville Bank at 1.75 percent, and the bank will offer it to the WHA at 3.5 percent – which means a 1.75 percent profit for the bank. Rockville Bank also gets points, by making a low-rate loan to a senior housing project, towards meeting its Community Reinvestment Act (CRA) requirements.
D. Berto said Rockville Bank also needs to complete its part of the paperwork in draft form by Sept. 17, 2012.
C. D’Agata and D. Berg asked if someone from the WHA should set up a meeting with Cebelius. D. Berto said to wait until after getting some feedback from Cebelius since the project was just given to him today (Sept. 10).
D. Berg and W. Gangaway asked for information about the consultant (Don Steadman) who D. Berto consulted with for the costing figures. D. Berto said he is someone he’s worked with for 15 years, and the consultant based the numbers on the set of plans, and that the consultant has access to data bases that are updated by contractors with real costs for projects. He added that the “real” numbers for Button Hill will likely change as the project goes forward and contractors give them actual prices, but these estimates will meet requirements for requesting funding.
D. Berg reported that he has received the information he requested regarding the structures’ walls (about keeping moisture out), i.e. sealing electrical box openings and re: vinyl siding and use of drainage seal/tape (vs a flap); and that plans now show more insulation in the attic.
New Business –
There was discussion about a suggestion made by B. Sullivan to consider building a greenhouse to meet the recreation requirement of the project.
Members reviewed materials emailed by B. Sullivan about different styles and costs of greenhouses, information about the physical, psychological and nutritional benefits of greenhouses for seniors/the elderly (also known as therapeutic horticulture), and different energy-efficient ways for heating/cooling a greenhouse.
The general feeling of WHA members was that the greenhouse wouldn’t be used and that it would add to the costs of the project. W. Gangaway said seniors at Willington Woods created raised-bed gardens but then abandoned them. He added that seniors wouldn’t want to walk to a greenhouse.
B. Sullivan said it’s possible to construct a lean-to type greenhouse with access from the units, and that there are raised plant tables and Lazy-Susan style tables that rotate that make it easy for people with mobility issues to use a greenhouse.
D. Berg said adding a greenhouse might be possible in future if there’s grant money available. W. Gangaway said this could be reconsidered once they know who the tenants are and if they’re interested. C. D’Agata also said this is something that could be reconsidered once the project is complete.
Approval of Minutes –
C. D’Agata moved and L. Millix seconded a motion to accept the Aug. 13, 2012 minutes with corrections: (line 59) the EDI Grant amount should be $196,000. Motion passed unanimously.
Treasurer’s Report –
C. D’Agata reported a balance of $3,926.54 and said the only expense was for (secretarial) payroll, $53.83 – W. Gangaway moved to accept the report, L. Millix seconded the motion, the motion passed unanimously.
Correspondence: C. D’Agata submitted a town document certifying that L. Millix had been sworn onto the WHA.
Adjournment – The meeting adjourned at 7:23 p.m.
Respectfully submitted,
Brenda Sullivan, WHA Recording Secretary
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