Louisville Housing Authority Agenda and Packet 2012 02 28

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sr..= Nip—m Louisville Housing Authority Louisville Housing Authority (LHA). Resolution 2012-02: A Resolution for the purpose of approving a return of$16,404.00 of payments to the East Street Limited Partnership and a loan of$13,883 to the East Street Limited Partnership for the purpose of replenishing East Street Limited Partnership Operating Reserve WHEREAS,the Louisville Housing Authority("LHA")is a the General Partner of the East Street Limited Partnership(the"Partnership"); and , . WHEREAS,the Partnership is governed by the terms of the First Amended and Restated Agreement of Limited Partnership of East Street, LP(the"Partnership Agreement"); and WHEREAS,Article 13 of the Partnership agreement sets forth the allocation of Net Cash Flow distributions; and . , WHEREAS, Section 2 48(d)of the Partnership Agreement,read in conjunction with Section 42(1)and 4/(m)of the Partnership Agreement, indicate that Net Cash Flow shall only be allocated after all deposits required to maintain the required balance in the Partnership operating reserve(the"Operating Reserve")have been made; and WHEREAS, LHA has received payments totaling$9,000.00 in 2004, $4,000.00 in 2005, and$3,404.00 in 2009 from the Partnership's Net Cash Flow Distributions before several deposits were made as required to maintain the required balance in the Operating Reserve;and WHEREAS, for the reasons set forth above, a total of$16,404.00 in payments were in violation of the terms of the Partnership Agreement; and WHEREAS, Section 4.5 of the Partnership Agreement provides that LEA has the obligation to fund the Operating Reserve as required by Section 4.2(m)of the Partnership . Agreement;and WHEREAS, Section 4.2(m)of the Partnership Agreement provides that the Operating Reserve shall be funded in an amount equal to six months of debt service reserve except loans subject to cash flow; and WHEREAS,the Operating Reserve is under funded by a total amount equal to $30,287.00; and WHEREAS, Section 4.7 of the Partnership Agreement authorizes LHA to loan funds to the Partnership without the consent of the limited partners of the Partnership in the event such loan is required in order for the Partnership to meet its obligations under this Agreement(a "Required General Partner Loan"); and WHEREAS, Section 4.7 of the Partnership Agreement provides that such General Partner Required Loan shall be unsecured and shall bear interest at a rate of 9.0%per annum. Post Office Box 471 Boulder, Colorado 80306 -(303)441-3929 TDD Colorado Relay 1-800-659-2656 6