City Council Study Session Agenda and Packet 2012 05 08

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Louisville Housing Authority April 12, 2012 Dear Mayor and Members of Council: We are seeking your support for the consolidation of the Louisville Housing Authority's (LHA) assets into the Boulder County Housing Authority (BCHA), Over the past year, the Louisville Housing Authority has been working on a comprehensive review of our portfolio with financial consultant SB Clark. The purpose of this analysis has been to assess the financial viability of each property and to prepare a plan for sustainable operations and growth of affordable housing in Louisville going forward. The LHA portfolio consists of 116 rental units located at seven sites serving low and moderate income households. The properties are operated under a number of different federal and local program requirements, including two properties operated under the Low Income Housing Tax Credit (LIHTC) program. The review is timely because: • Federal funding for affordable housing programs has seen drastic cuts in recent years; • Several of the properties operate at a loss and require cash flow from other properties to sustain their operation; • The two LIHTC properties are owned through partnership with private investors, and both are nearing the end of the partnership's term, meaning that both properties will require restructuring and refinancing; • The inefficiency of having two independent housing authorities operating in Louisville has been a topic of discussion for many years; • LHA does not believe that its current structure will allow it to expand its affordable housing stock; and BCHA is currently in the process of refinancing and restructuring its affordable housing portfolio, and for a short time is in a unique position to be able to bundle LHA's existing affordable housing assets into this refinancing. SB Clark's study concluded that the size of LHA's portfolio limits opportunities for operational efficiency, and recommended that LHA consider all opportunities to achieve greater operating efficiencies and economies of scale, either through aggressive growth of the portfolio, or merging with a larger organization, such as BCHA. Post Office Box 471 Boulder, Colorado 80306 (303) 441-3929 TDD Colorado Relay 1- 800 -659 -2656 6