City Council Study Session Agenda and Packet 2012 05 08

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PAGE TWO SUBJECT: DISCUSSION WITH LOUISVILLE HOUSING AUTHORITY (LHA) - CONSIDERATION OF LHA CONSOLIDATION WITH BOULDER COUNTY HOUSING AUTHORITY DATE: MAY 8, 2012 receives the benefit of several "in- kind" services that BCHA provides free of charge, including the Executive Director, IT, Human Resources, legal, procurement, risk management and oversight of insurance. Because of the restricted nature of the Sunnyside tax credit partnership and the poor performance of that asset, BCHA also absorbs some of the cost to manage it, estimated at $11,120 in 2011. What is the proposed relationship between the two organizations? The proposal is to create an intergovernmental agreement between LHA, City of Louisville, and BCHA to transfer LHA's assets to BCHA, and eventually dissolve LHA. What are the benefits of consolidating the assets? There are considerable benefits to consolidating the assets and dissolving the LHA. Most importantly, BCHA would have greater ability to refinance and renovate the properties. The LHA Board would also be relieved of the contingent liabilities associated with the Housing Authority. All the agencies would benefit from a reduction in overhead associated with the separate audits, financial statements, and oversight of board materials and management agreements. And lastly, although minimal, the City of Louisville would have reduced staff time related to LHA issues and the City Council would no longer appoint an LHA Board. What does Louisville get in exchange for transferring ownership of units to BCHA? BCHA would commit to managing the same or greater number of units in Louisville in perpetuity. BCHA would commit to increasing housing choices in Louisville by adding units to the affordable rental housing inventory. The County Commissioners would appoint a Louisville representative to sit on the Housing and Human Services Advisory Board. In addition, LHA would be relieved of trying to manage aging assets with complex regulatory constraints and limited resources. BCHA would benefit from the operating efficiencies of having a single ownership entity. BCHA would take responsibility to ensure the properties are properly recapitalized and renovated over the next five years. If LHA transfers its assets to BCHA, where will residents take their concerns? Because BCHA manages the LHA portfolio already, the current process by which residents bring concerns to property managers and maintenance staff will remain the same. BCHA will ensure that current contact information is posted in a visible place in all the properties, is available on our website, and is included in lease documents and resident move -in packets. BHCA would continue to conduct community meetings as an additional forum for residents to bring up concerns. When a resident concern or complaint is not resolved at the maintenance or property manager level, they may bring it to the Housing Division Director and then the Executive Director. As part of the proposed agreements, the Boulder County Commissioners would appoint a Louisville representative to be a member of the Housing and Human Services Advisory Board, which would be another avenue for resident concerns. Residents would also continue to have access to elected officials at the County Commissioner level and at the City of Louisville to voice any concerns. What is the value of the LHA portfolio? The value of the LHA portfolio must be determined using full consideration of the income restrictions and current quality of the assets. Both of these considerations diminish the intrinsic value in the land and the buildings associated with unrestricted real estate. In addition, several of the properties bring in less revenue than they cost to operate at present. Each property contains protective covenants that require the properties be used only for affordable housing. The financial consultant, SB Clark, used an 3