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Home My WebLink About2019-06-13MINUTES PALM DESERT HOUSING AUTHORITY MEETING THURSDAY, JUNE 13, 2019 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Chairman Weber convened the meeting at 3:00 p.m. II. ROLL CALL Present: Member Jan C. Harnik Member Sabby Jonathan Member Kathleen Kelly Vice Chairman Gina Nestande Chairman Susan Marie Weber Also Present: Lauri Aylaian, Executive Director Robert W. Hargreaves, City Attorney Rachelle D. Klassen, Secretary Lori Carney, Director of Administrative Services Russell Grance, Director of Building & Safety J. Luis Espinoza, Assistant Finance Director Bo Chen, City Engineer Eric Ceja, Principal Planner Stephen Y. Aryan, Risk Manager Joseph Belli, Captain, Palm Desert Police/Riverside County Sheriffs Department Francisco Velasco, Admin. Sgt., Palm Desert Police/Riverside Co. Sheriffs Dept. M. Gloria Sanchez, Management Specialist II III. ADJOURN TO CLOSED SESSION Request for Closed Session: None With Authority Board concurrence, Chairman Weber adjourned the meeting to Closed Session of the City Council at 3:01 p.m. She reconvened the meeting at 4:11 p.m. MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 13, 2019 IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None V. CONSENT CALENDAR For clarification, Housing Authority Consent Calendar is combined into the CITY COUNCIL AGENDA, Section XII - CONSENT CALENDAR and considered jointly. It appears here only for record -keeping purposes. A. MINUTES of the Housing Authority Meeting of May 23, 2019 (See City Council Agenda Section XII - Consent Calendar, Item U). Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST THE CITY/HOUSING TREASURIES - Warrants Dated 5/17/2019 and 5/24/2019 (Joint Consideration with the Palm Desert City Council - See Section XII - Consent Calendar, Items C and V). Rec: Approve as presented. C. REQUEST FOR APPROVAL of an Extension to Contract with John Harrison Contracting, Inc., for HVAC Mechanical Systems Maintenance Services at the Palm Desert Housing Authority Properties in an Amount Not to Exceed $175,000 for Fiscal Year 2019-2020 (Contract No. HA37271) (See City Council Agenda Section XII - Consent Calendar, Item W). Rec: By Minute Motion, approve/authorize: 1) Extension to subject contract with John Harrison Contracting, Inc., Banning, California, for the HVAC Mechanical Systems Maintenance Services at Palm Desert Housing Authority Properties for a period of 12 months for FY 2019- 2020 in a total amount not to exceed $175,000 for contract services; 2) Executive Director and/or the Chairman to execute the extension and any documents necessary to effectuate the actions taken herewith — monies have been included in the FY 2019-2020 proposed Authority's Replacement Reserve Budget in the appropriate Authority Accounts. 2 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 13, 2019 D. REQUEST FOR AUTHORIZATION to Use Curtis Allan Floorcovering, Inc., for Purposes of Procuring Floor Coverings and Related Supplies and Services with Mohawk Carpet Distribution, Inc., at Palm Desert Housing Authority Properties in a Total Annual Amount Not to Exceed $125,000 (Contract No. HA38760) (See City Council Agenda Section XII - Consent Calendar, Item X). Rec: By Minute Motion, approve/authorize: 1) Use of Curtis Allan Floorcovering, Inc., National City, California, as the authorized vendor for purposes of procuring floor coverings and related supplies and services (includes cost for non -warranty partial replacements and repairs) at the Palm Desert Housing Authority properties for a term of three (3) years under Sourcewell Agreement Contract No. 121715-MCD with Mohawk Carpet Distribution, Inc., pursuant to Sections 3.30.160(L) and 3.30.160(E) of the Palm Desert Municipal Code, in a total amount not to exceed $125,000; 2) continued participation with the service cooperative Sourcewell, formerly National Joint Powers Alliance; 3) Authority's Legal Counsel to negotiate and finalize an agreement with Curtis Allan Floor Covering, Inc.; 4) Chairman and/or the Executive Director to execute the Agreement and any documents necessary to effectuate the actions taken herewith — monies have been included in the FY 2019-2020 proposed Authority's Operating Budget in the appropriate Authority accounts for each property. E. REQUEST FOR APPROVAL of Change Order No. 1 and to Accept Work as Complete for Contract No. HA37350 — Top Stair Handrail Replacement at One Quail Place (Project No. 821-19) (S & T Contractors, Inc., d.b.a. Service Master Restoration by S & T, Santa Clarita, CA) (See City Council Agenda Section XII - Consent Calendar, Item Y). Rec: By Minute Motion: 1) Approve Change Order No. 1 in the amount of $4,940 to subject contract for replacement handrail parts for the stair top handrails at One Quail Place; 2) accept subject contract as complete; 3) authorize the City Clerk/Secretary to file a Notice of Completion with the Riverside County Recorder for said project — funds are available in Account No. 8714195-4331100 - Authority's Capital Replacement Budget. Upon a motion by Harnik, second by Kelly, and 5-0 vote of the City Council/Successor Agency Board/Housing Authority Board (AYES: Harnik, Jonathan, Kelly, Nestande, and Weber; NOES: None), the Consent Calendar was approved as presented. 3 MINUTES PALM DESERT HOUSING AUTHORITY MEETING VI. CONSENT ITEMS HELD OVER None VII. RESOLUTIONS None VIII. NEW BUSINESS JUNE 13, 2019 A. REQUEST FOR AUTHORIZATION OF AMENDMENTS THAT MAY BE NECESSARY TO THE AGREEMENTS WITH PD HOVLEY LP, FOR THE PROJECT KNOWN AS HOVLEY GARDENS, TO ACCOMPLISH A TRANSFER OF OWNERSHIP, REFINANCE, REHABILITATION, AND AN EXTENSION OF THE AFFORDABILITY PERIOD (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL). Ms. Aylaian stated the subject item was a request for staff to negotiate amendments to existing agreements for Hovley Gardens, an affordable apartment complex that was built in the early 2000s with a loan of approximately $7.6 million from the Redevelopment Agency before it was dissolved. It was a low -interest loan provided to developer Dan Horn, who is well known to all but whose company name has changed since inception of the project, now Palm Communities. The developer has identified an opportunity to do a number of positive things for the property that will require a change and transfer in ownership. Therefore, they're proposing to amend the existing agreements in order to accomplish the project benefitting the residents and City, including renovation and rehabilitation that will incorporate ADA (Americans with Disabilities Act) improvements, energy efficiencies, new appliances, floors, and cabinetry on the interiors; renovation of the laundry room and some of the common areas, landscaping, exterior painting, and new playground equipment — a refresh to the entire development. Benefits to the City include that the 55-year limitation on affordability will restart, extending it from the original expiration. One drawback is that the City currently receives a payment in lieu of property taxes (a.k.a. PILOT), which would not be carried forward under the new agreement; however, the proposal would allow the City to negotiate some other payment that would be roughly equivalent, but technically not a PILOT. This request also allows the developer to resyndicate and transfer ownership, but he will continue as principal in the new group and be responsible for performing the aforementioned improvements. Staff was seeking authorization at this time for the draft agreements to be negotiated, as the developer needs it in order to propose documents for the next tax credit funding cycle application deadline of July 1. She advised that Mr. Horn 4 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 13, 2019 was present today to answer any questions, as was Senior Management Analyst Veronica Tapia. Responding to question, she confirmed that the project was initially constructed in 2003, adding that the agreements for it were signed in 2001. In further response, she agreed that if nothing else happened, the affordability period would be up through 2058. Although, she believed the affordability period started to run when the documents were executed and agreement finalized, not at completion of the renovation project. She confirmed that it would essentially add 16 years to that period. In answer to another question, she responded that the affordability covenant is 45 years for ownership units and 55 years for rentals. She went on to answer that it does not add any further credit to the City's RHNA (Regional Housing Needs Assessment) required unit production numbers. Councilmember/Member Harnik moved to, by Minute Motion: 1) Consent to the transfer of property commonly known as Hovley Gardens, located at 74501 Avenue 42, Palm Desert, from PD Hovley LP to Palm Communities (formerly known as Palm Desert Development Company), or a new limited partnership; 2) authorize staff to proceed with the drafting of amendments to the existing agreements with PD Hovley LP and the Palm Desert Housing Authority, allowing for a transfer of ownership, refinance, rehabilitation, and extension of the affordability period; 3) authorize Palm Communities to submit an application to the Tax Credit Allocation Committee (TCAC) on or before July 1, 2019, for the rehabilitation of Hovley Gardens; 4) authorize the following related to the Authority Loan: a) Assumption of the Authority loan in the event of a transfer of property by the new owner; b) subordination of the Authority's loan to a construction loan if tax credits are allocated to the project; c) extension of the term of the loan for a period of 41 years (for a total of 55 years) from the close of any purchase; d) suspension of payments to the Authority on the loan for the 12- to 24-month construction timeframe, once established; 5) authorize the City Manager, Executive Director, Mayor, Chairman, and legal counsel to finalize the selected option and execute any documents necessary, consistent with the actions contemplated herewith. Motion was seconded by Mayor Pro Tem/Vice Chairman Nestande. Councilmember/Member Kelly wished to affirm for the record on this proposal that it is increasingly challenging to enable affordable housing after the loss of Redevelopment, so it does certainly achieve a key City goal, as does the inclusion of energy efficiency for this property. That meant it was positive on two fronts. Mayor/Chairman Weber called for the vote, and it carried 5-0 (AYES: Harnik, Jonathan, Kelly, Nestande, and Weber; NOES: None). 5 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 13, 2019 IX. CONTINUED BUSINESS None X. OLD BUSINESS None XI. PUBLIC HEARINGS None XII . REPORTS, REMARKS, AND AUTHORITY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. AUTHORITY COUNSEL None C. CHAIRMAN AND MEMBERS OF THE AUTHORITY None XIII. ORAL COMMUNICATIONS - C None XIV. ADJOURNMENT With Authority Board concurrence, Chairman Weber adjourned the meeting at 5:31 p.m. ATTEST: RAC-?-IELLE D. KLASSEN ECRETARY PALM DESERT HOUSING AUTHORITY S,-.-- - D"-- . „A-isi` SUSAN MARIE WEBER, CHAIRMAN 6