Willington Housing Authority
MINUTES
April 14, 2014
60 Old Farms Road – Senior Center
Willington, CT
PRESENT – Chairman Robert Campbell, Vice Chair Wilbur Gangaway, Secretary Don Berg,
Member Laurel Millix, Treasurer Claudia D’Agata, financial consultant David Berto; From Putnam Bank: AVP and Sr. Credit Analyst Clara Angelos and AVP Commercial Loan Officer (and member of the board) Jay Sinha.
1. Call to order – The meeting was called to order at 6:10 p.m.
2. Present to speak – Representatives of Putnam Bank regarding the CHAMP funding application.
3. Old Business – Button Hill senior housing project
R. Campbell reported that he received an email notification that the Button Hill project has been chosen for CHAMP 4 grant funding.
D. Berto said CHAMP 4 probably was viewed more favorably than the previous applicaton because the project now has Federal Home Loan Bank (FHLB) funding approval.
Asked whether “prevailing wage” was used when calculating project costs, D. Berto said no, because of disagreement between the Dept. of Labor (DOL) and the Dept. of Housing (DOH) on this question, whether Housing Authorities are required to use “prevailing wage.”
However, at a presentation for the next round of funding that D. Berto attended, Ed LaChance said Housing Authorities should use “prevailing wage,” in case that's the final decision. So, the the Willington Housing Authority (WHA) needs to ask the Button Hill senior housing project contractor (Zlotnick) to adjust his pricing to reflect “prevailing wage.”
Noting that the CHAMP 4 grant is $760,000 more than originally requested, to provide a buffer for recalculating with “prevailing wage” numbers (the submitted request was $2,375,000), R. Campbell said this means the project's mortgage will be less and so, this will reduce debt service costs.
D. Berto said the estimated mortgage would be $1.7 million. R. Campbell asked if the length of the mortgage can be changed. D. Berto said the FHLB locks in its rates when construction begins.
W. Gangaway asked if the DOH can take back the additional $760,000 if it's decided Housing Authorities do NOT need to use “prevailing wage.” D. Berto said yes, but the DOH may choose not to and noted that “prevailing wages” are relatively low.
J. Sinha asked if the state would be auditing the project's expenditures. D. Berto said yes, but if there is any money left, it would be used to lower the mortgage.
D. Berto said he's waiting for official written notification from CHAMP 4 of the funding approval, so that he can move forward with the Federal Home Loan Bank. He explained that Putnam Bank is the interface with the FHLB, which then gives the funds to the WHA to pay project costs. He said all the forms that will need to be completed are web-based (i. e. requisitions, semi-annual reports, etc.). He said FHLB has already sent Putnam Bank a notification and a “next steps guide.”
C. Angelos said she took the FHLB webinar.
D. Berto said he was sent a report on why the Willington project received points (in competition against other grant applications) and that CHAMP administrators will check when the project is completed whether the WHA did everything that was listed on the application.
D. Berto said FHLB sent him a “program agreement,” which allows FHLB to open billing on their website. WHA now has to open an account with Putnam Bank.
C. Angelos said the WHA also has to submit a formal loan application. Currently, the bank has just submitted a proposal on behalf of the WHA. Next steps will include final underwriting. She gave D. Berto related documents and said she will email him additional forms to complete. There also needs to be a mortgage and note that has to be recorded, and an appraisal of the property
R. Campbell said the appraisal done several years ago will probably have to be redone. C. Angelos said it has to be done independently.
R. Campbell asked what is the bank's timeline. C. Angelos said the board meets every two weeks – and the project is now at a level where it requires board approval.
D. Berto said it would take 2 to 3 weeks to get figures back from the contractor, reflecting “prevailing wages” in order to give Putnam Bank an updated budget.
C. Angelos asked if costs will have changed since six months have gone by. D. Berto said probably not, because the contractor was asked to base his estimates on a starting time this summer. He said the State's end of the process could take 3 to 4 months.
R. Campbell said the WHA still needs to talk with Putnam Bank about some “gap funding,” now that the WHA has a source for repaying such a loan.
D. Berto said the WHA will need to do the first phase of the project during the 3 to 4-month wait for the state to complete its process.
C. Angelos asked if all permits are in place. D. Berto said all initial reviews are completed; the project will just need a building permit.
C. Angelos said the WHA should complete two loan applications now – one for the $1.7 million and one for the $25,000 “gap funding” and include the new information about its sources of funding. She also asked if the housing project's projected rents have changed. D. Berto said no, but at the end of the project, the WHA will review costs, and they may be able to lower rents or offer more options.
D. Berg asked if there would be any financial benefit to the WHA owning the solar equipment. D. Berto said that in order to take advantage of tax credits, the WHA would have to create a for-profit entity – in order to be taxed – and then apply for the tax credits. However, if there are extra funds, the WHA could look at solar-generated power. D. Berg said he sees solar equipment as a way of lowering energy costs.
There was discussion about the complexity of appraising a project like Button Hill versus a standard building project, particularly because the land value was donated by the Town and there are “soft” costs that come with this kind of housing project.
D. Berto suggested the WHA think about hiring a part-time bookkeeper for such tasks as keeping track of funds coming in, checks written, statements, etc. Or the WHA could designate someone on the committee to take this on; his office could show them how to do these tasks. D. Berto's office would prepare the billing on a monthly basis. There was discussion about possibly paying bills through electronic transfers instead of writing checks
C. D'Agata asked, with more than one account, what if a check is accidentally written from the wrong one. D. Berto said it's easy to correct that kind of error.
D. Berto said the WHA needs to set up a Housing Authority account and a Project account at Putnam Bank and put $100 in it.
D. Berg asked about the status of the press release announcing the grant. D. Berto said the DOH wants to issue a joint release and he is waiting for them to move forward with this.
There was discussion about when to hold a groundbreaking ceremony and it was agreed that it should be held when the project enters the construction phase (not during the infrastructure phase).
4. New Business – none.
5. Approval of minutes – D. Berg moved and L. Millix seconded the motion to accept the March 10, 2014 minutes as presented. The motion passed unanimously.
6. Treasurer’s report – C. D'Agata presented the Treasurer's Report, and noted a balance of $1,681.01.
7. Correspondence – Rockville Bank statements were given to R. Campbell. Gardener & Peterson bills were given to C. D'Agata.
8. Adjourn – The meeting adjourned at 7:20 p.m.
Respectfully submitted by Recording Secretary Brenda Sullivan. Please note that minutes are posted prior to being officially approved – changes/corrections are indicated in the subsequent month’s meeting minutes.
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