MINUTES OF A REGULAR MEETING
OF THE BOARD OF COMMISSIONERS
OF THE HOUSING AUTHORITY
OF THE CITY OF EL PASO, TEXAS
WEDNESDAY, MAY 25, 2016
Item # 1. Call to Order. The Chairperson called the meeting to order at 5:30 p.m.
Item # 2. Pledge of Allegiance. Recited Pledge of Allegiance.
Item # 3. Invocation/Moment of Silence. Moment of silence.
Item # 4. Establishment of a Quorum.
PRESENT: Chairperson Burt Blacksher, Presiding; Commissioners Eileen Karlsruher, Francisco Ortega, Anna Perez, and Lupita Licerio. The Chairperson declared a quorum with all Commissioners present.
ALSO PRESENT: Gerald Cichon, Chief Executive Officer; Bob Blumenfeld, HACEP Attorney; Art Provenghi, Corporate Attorney; Donna Clarke, Chief Operations Officer; Satish Bhaskar, Chief Financial Officer; William Zeigler, Chief Human Resources Officer; Daniel Cantu, Chief Information Technology Officer; Richard Seges, Chief Real Estate Officer; Hector Montoya, EP HOME General Manager; Hanna Sarah, Director of Finance; Ed Gill, Director of Construction; Roman Velasquez, Director of Housing Programs; Javier Camacho, Public Information Officer; Oscar Arriaga, Public Information Specialist; Juan Pulido, Procurement Manager; Marta Mena, Quality Control and Compliance HCV Supervisor; Patricia Quintanilla and Aracely Saenz, Executive Secretaries.
Item # 5. Resident Association Presidents to be Heard. None.
Item # 6. Citizens to be Heard. Javier Camacho, PIO Officer, said that we had an opportunity to partner with KCOS and through our Community Services team we were able to help socialize their second annual PBS Kids Writing Contest. Out of 150 contestants three winners are from HACEP communities. At this time, we want to recognize our award winning writers. He introduced first grader, Kayla Delilah Quinonez, who received second place in her category for her work titled “Anastacia and Brownie.”
Kayla Delilah Quinonez said that she was very happy.
Mr. Camacho introduced second grader, Andrea Villa, who received third place in her category for her work titled “The Two Indians.”
Andrea Villa said that she is very proud of her work.
Mr. Camacho introduced third grader, Bryan Valenzuela, who received third place in his category for his work titled “Mi Propio Jardin/My Own Garden.”
Bryan Valenzuela said that he is very happy with his third place award.
Mr. Camacho thanked the Commissioners for their time.
Item # 7. Approval of Minutes of a Regular Board Meeting That Took Place on April 27, 2016. Commissioner Karlsruher made a motion to approve item # 7. It was seconded by Commissioner Licerio. Motion carried unanimously.
Consent Agenda:
Item # 8. Purchasing and Construction Contract and Purchase Order Awards:
A. Request that the Contracting Officer be Authorized to Sign Extension to Contract for Human Resources and Payroll Services Contract # FS 13-C-0060. This is for a Twelve Month Extension. This Contract was Procured Through the TCPN Cooperative Process. The Recommendation is as Follows:
Department: / Finance/Human ResourcesAward to: / ADP, Inc. / $295,000 Estimated
Funding Source: / Operating Budget
Procurement Type: / TCPN Contract # R5159
Contract Term: / Renewal
B. Request that the Contracting Officer be Authorized to Sign Extension to Contract for Legal Services. This is the Third Renewal of Four, and Name Change Regarding Mendel Blumenfeld, LLP to Mendel Blumenfeld, PLLC. This Contract was Procured Through the Request for Proposal (RFP) Process. The Recommendation is as Follows:
Department: / Executive/DevelopmentAward to: / Mendel Blumenfeld, PLLC
Contract # EX 14-C-0002
Kemp Smith, LLP
Contract # EX 14-C-0003
McKamie, Krueger & Knight, LLP
Contract # EX 14-C-0005
Coats Rose, PC
Contract # EX 14-C-0006
Gordon, Davis, Johnson & Shane, PPC
Contract # EX 14-C-0007
Hawkins, Delafield & Wood, LLP
Contract # 14-C-0008 / $500,000
Combined
Estimate
Funding Source: / Executive/Development
Procurement Type: / Request for Proposal (RFP)
Contract Term: / Renewal
C. Request that the Contracting Officer be Authorized to Sign Extension to Contract for Life and Disability Insurance Contract # HR 14-C-0048. This is the Second Renewal of Four. This Contract was Procured Through the Request for Proposal (RFP) Process. The Recommendation is as Follows:
Department: / Human ResourcesAward to: / Lincoln Financial Group / $87,280 Estimated
Funding Source: / Operating Budget
Procurement Type: / Request for Proposal (RFP)
Contract Term: / Renewal
D. Request that the Contracting Officer be Authorized to Sign Extension to Contract for Architect – Development of Drawings and Specifications for Renovation of Multiple Housing Communities Contract # RAD 16-C-0004. This is the First Renewal of Four. This Contract was Procured Through the Request for Qualifications (RFQ) Process. The Recommendation is as Follows:
Department: / RADAward to: / Wright & Dalbin
Architects / $3,200,000 Original Approved Amount
$376,869 Amount Paid to Date
$2,826,130 Available Balance
Funding Source: / RAD
Procurement Type: / Request for
Qualifications (RFQ)
Contract Term: / Renewal
E. Request that the Contracting Officer be Authorized to Sign Extension to Contract for Architect – Development of Drawings and Specifications for Renovation of Multiple Hi-Rise Housing Communities Contract # RAD 16-C-0005. This is the First Renewal of Four. This Contract was Procured Through the Request for Qualifications (RFQ) Process. The Recommendation is as Follows:
Department: / RADAward to: / Wright & Dalbin
Architects / $1,260,000 Original Approved Amount
$199,442 Amount Paid to Date
$1,060,558 Available Balance
Funding Source: / RAD
Procurement Type: / Request for
Qualifications (RFQ)
Contract Term: / Renewal
F. Request That the Contracting Officer be Authorized to Sign Recommendation for Purchase Order Award for Postage for HACEP Print Shop. This is a Single Source Purchase. The Recommendation is as Follows:
Department: / ProcurementAward to: / Purchase Power (Pitney Bowes) / $68,276 Estimated
Funding Source: / COCC/Programs
Procurement Type: / Single Source
Contract Term: / Purchase
Mr. Cichon discussed the proposed items under the consent agenda and offered to answer any questions.
Commissioner Ortega made a motion to approve consent agenda items # 8 A-F. It was seconded by Commissioner Karlsruher. Motion carried unanimously.
REGULAR AGENDA
Item # 9. Discussion and Action Regarding Resolution for Writing Off Bad Debt Accounts From Tenants Accounts Receivable for Vacated Tenants – Quarter Ending December 31, 2015. Satish Bhaskar, Chief Financial Officer, said that we are requesting the combined write off of $33,000 from Public Housing, Section 8 New Construction, and Tio Cooper. He said that for this quarter the amount requested to be written off is higher than budgeted, but overall we are still within budget. Mr. Bhaskar offered to answer any questions.
Commissioner Ortega made a motion to approve Resolution 2092 under item # 9. It was seconded by Commissioner Karlsruher. Motion carried unanimously.
Item # 10. Discussion and Action Regarding Resolution Adopting the Revised Utility Allowance Schedules for Use in the Housing Choice Voucher Program. Marta Mena, Quality Control and Compliance Supervisor for HCV, said that we are required to revise our utility allowance on a yearly basis when there is a change of 10% or more in any utility rate. We solicit an annual study on current utility rates and consumption for the El Paso area to review if a change of 10% in the rates has occurred. The study showed that the providers’ rates have changes more than 10%, therefore, the current utility allowances schedules require revision. Ms. Mena discussed the methodology used for the study and showed a comparison of current and proposed allowances for the different type of units. She pointed out that the study is based on community wide consumption and rates. Ms. Mena offered to answer any questions.
Commissioner Perez made a motion to approve Resolution 2093 under item # 10. It was seconded by Commissioner Ortega. Motion carried unanimously.
Item # 11. Discussion and Action Regarding Resolution Authorizing the Issuance of Multifamily Revenue Bonds or Other Obligations With Respect to HACEP RAD Conversion Program Chelsea Plaza Apartments Multifamily Residential Rental Project; Authorizing the Filing of Application for Allocation of Private Activity Bonds With the Texas Bond Review Board; and Authorizing Other Action Related Thereto. William Avila, Bond Legal Counsel from Bracewell, LLP, said that this item is to authorize Alamito Public Facilities Corporation to submit an application to the Texas Bond Review Board for an allocation of tax exempt bonds from the State, which will allow us to finance the Chelsea Plaza Apartments project. He said that this goes along with the tax credits that we will be submitting. He added that we will be asking for the maximum amount possible, which is $20 million, and we can always reduce it depending on where the financing comes out.
Mr. Bhaskar added that we have three additional big tranches with estimated development costs of $60 million, $75 million, and little under $60 million. The plan is to get reservation for all $200 million in August when the collapse happens.
Commissioner Karlsruher asked if we were anticipating any problems with getting the combine $200 million in August.
Mr. Avila responded that right now the program is undersubscribed at the State level. There is a lot more than $200 million available. He added that once the application is submitted, we should get a response within two days.
Commissioner Karlsruher made a motion to approve Resolution 2094 under item # 11. It was seconded by Commissioner Licerio. Motion carried unanimously.
Item # 12. Discussion and Action Regarding Resolution Authorizing Actions With Regard to the Redevelopment of the Sherman and Westfall Properties (the “Projects”) to Wit: (A) Negotiate and Execute Letters of Intent With Development Partners; and (B) Such Other Actions Necessary or Convenient to Carry Out This Resolution. Robert Blumenfeld, Legal Counsel, said that this is a broad resolution authorizing Mr. Cichon on behalf of the Housing Authority and its affiliates to start working with the different companies that either lend money or serve as equity investors in this project. He added that there will be a secondary round of approvals by the Board at the closing.
Commissioner Karlsruher asked if this is authorization to enter into a letter of intent and when it comes back the Board will just approve what was negotiated.
Attorney Blumenfeld said that most of the core and key decisions are going to be made in this letter of intent, but the final approval will be subject to additional approvals the Board will do at or near the time of closing. He pointed out that there are times when we have had to close and then bring it to the Board for approval.
Commissioner Licerio made a motion to approve Resolution 2095 under item # 12. It was seconded by Commissioner Perez. Motion carried unanimously.
Item # 13. Presentation, Discussion and Possible Action Regarding Construction Schedules and Possible Construction-Related Issues at RAD Sites. Mr. Cichon said that we have had some slowdowns caused by various reasons. We prepared a presentation to show where we stand and where we are headed. He asked Mr. Seges to elaborate.
Richard Seges, Chief Real Estate Officer, said that he will first talk about schedules, challenges solutions to the challenges, and vacancies. He said that this discussion is mostly regarding Tranche 1A that we are developing with Hunt Companies. He presented a chart showing the planned, delivery vs. the actual and projected delivery of units. He said that we found a number of factors affecting the renovation of these units. The end result was that our schedules stretched from a six-month renovation period to an average of about eight months. In several communities we have phased renovations and if the first part goes out by a couple of months, the next part starts a couple of months late adding up to a longer duration. He said that this would not present a significant problem except that because of the tax-credit delivery requirements and requirements on our debt, we have a hard completion date on Tranche 1-A of May 2017. Mr. Seges discussed a graphic showing the planned, actual, projected, and accelerated schedules as well as an overall construction schedule. He pointed out that toward the end of our RAD 1 project we have a lot of communities under construction at the same time; more than we anticipated. Also, because we have been awarded 9% tax-credits, we have a number of communities under construction putting a lot of pressure on the vacancies within our portfolio. The 9% properties take about 18 months to complete vs. the six to eight months in a renovation community.
Commissioner Ortega asked how likely is that we will hit the May 2017 target.
Mr. Seges responded that we worked a plan with Hunt Companies and Moss Construction and we are ready to proceed. Everybody is very confident with it, but it does take some additional manpower because they will have more communities under construction at the same time. The biggest risk is it to make sure that the sub-contractor pool that they have is capable of doing that or they may need to bring additional sub-contractors on board.
Commissioner Ortega asked if that is putting us over budget.
Mr. Seges said that we anticipate some additional hard cost in the construction contract and cost associated with the need for additional supervision.
Commissioner Ortega asked what the extra cost that we are anticipating is.
Mr. Seges said we are in the middle of those discussions, but the latest proposal is about $7.5 million, which we anticipate being able to absorb most of it within the existing contract. He added that right now we have about $5 million in contingency inside the contract and about $5 million outside the contract.
Mr. Cichon said that the challenge as we move into this is that we have different site conditions that we are not really sure what we are going to find; we believe that we are still going to have increases coming in. The GMP is there, but it may fall outside of that depending on the site conditions. Those are things that we just don’t know, but, as of right now, we believe that we have the funds to handle it even with certain things that may be discovered.
Mr. Seges said that we had numerous meetings with Moss and Hunt and some of the things that we worked into our plan include a revised plan with an average of eight month duration per community in Tranche 1A; we accelerated the turnover of the remaining Tranche 1A properties to make sure that they get completed by May 2017; we handed over one building in each community to the contractor for early discovery; we are incorporating any different site conditions into the contract before construction starts; we streamlined processes for change orders and payments; and we made sure that everybody is performing their role with written agreements and partnering meetings.