City Council Study Session Agenda and Packet 2012 04 24

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PAGE TWO SUBJECT: UPDATE/DISCUSSION - LOUISVILLE HOUSING AUTHORITY (LHA) PORTFOLIO ANALYSIS AND CONSIDERATION OF LHA CONSOLIDATION WITH BOULDER COUNTY HOUSING AUTHORITY DATE: APRIL 24, 2012 possibility of an early exit of the investor in East Street now that the tax credits have been earned at this property. At a minimum, examine East Street debt to lower the first mortgage interest rate. Minutes from the March 13, 2012 LHA meeting where the report was discussed are also included for reference. Based on the analysis, recommendations and further discussion at LHA Board meetings, City of Louisville considerations also include the following: A) Management Contract with BCHA short term cancellation risk B) BCHA management fees do not cover all its costs C) Acquisition/rehab or new development limited D) Benefits of Consolidation to Louisville 1) Reduced liability 2) Decreased Asset Exposure – potential subsidy investments for rehab, refinance, etc. 3) Negotiate for additional units – new development and/or acquisition /rehab with emphasis on Louisville live/work E) Benefits of Consolidation to Both LHA and BCHA 1) Consolidation of management function from separate authorities 2) Consolidation of audits, cost savings 3) Creates efficient, effective combination for future sustainability and growth in tighter government funding landscape. As a result of the report and further discussion, LHA prepared the attached letter requesting City Council support/consideration for consolidation of the Louisville Housing Authority’s assets into the Boulder County Housing Authority.The letter goes into detail about the reasoning for consolidation and the opportunities for coordination with BCHA (consistent with the issues identified above). The LHA at this stage proposes to enter into an Intergovernmental Agreement with BCHA, LHA and the City of Louisville. The IGA would transfer current assets and liabilities to BCHA over the course of the next year. Under the terms of such an IGA, BCHA would commit to continue to maintain the current level of affordable housing units in Louisville and to develop or acquire a specified number of additional affordable housing units over a period of time. The LHA Board would like to receive some feedback on the concept of consolidation and the transfer of assets to BCHA in exchange for BCHA’s commitment on the provision and expansion of affordable housing in the City of Louisville. Formal consideration of such action th would occur at the May 15 City Council meeting. FISCAL IMPACT: LHA would retain its own attorney to prepare and review the IGA with BCHA. This cost would be covered by the LHA. There would be some cost for the City Attorney to review the IGA on 3