HomeMy WebLinkAboutMINUTES - 10201992 - 1.51 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
TO: BOARD OF COMMISSIONERS DATE: October 20, 1992
FROM: Richard J. Martinez, Acting Interim Executive Director cc:
SUBJECT: CASA DEL RIO SENIOR HOUSING DEVELOPMENT RESOLUTION NO. 3660 AUTHORIZING
THE ACTING INTERIM EXECUTIVE DIRECTOR TO SECURE 1) LINES OF CREDIT NOT TO
EXCEED$450,000 TO PROVIDE THE REMAINING CASH FROM LOCAL SOURCES NEEDED AT
CLOSE OF ESCROW AND ADDITIONAL FUNDS REQUIRED FOR PROJECT RESERVES; AND
2) A RESTRICTED ACCOUNT OR LETTER OF CREDIT FOR AN $80,325 BOND SECURITY
ESCROW FEE FOR THE CALIFORNIA HOUSING FINANCE AGENCY PERMANENT FINANCING
FOR THE PROJECT.
I. RECOMMENDED ACTION
ADOPT Resolution No.3660 authorizing the Acting Interim Executive Director to apply for and secure 1) lines
of credit, in an amount not to exceed $450,000, at Bank of America to provide the remainder of the cash from local
sources that will be needed at the close of escrow and additional funds required for project reserves;and 2)a restricted
account or a letter of credit for the $80,325 Bond Escrow Security.Fee required for the California Housing Finance
Agency (CHFA) permanent financing for Casa del Rio, an 82 unit very low income senior housing development in
Antioch.
II. FINANCIAL IMPACT:
The Housing Authority will need to secure up to $450,000 in funds that are currently in Housing Authority
accounts in Bank of America to cover these costs. The Authority will be required to pay not more than $4,500 in fees
to establish the lines of credit. In addition, the Authority would pay 8% interest on any funds actually expended.
Because$100,000 of this total would be specifically for contingency funds,it is not anticipated that this amount would
be expended. The City would reimburse the Authority for$162,917 of this amount in July 1993 and$115,000 in July
1994 when the tax increments will be available. The remainder, $72,083,would be a cost to the Authority beyond the
$150,000 authorized under Resolution No. 3651 which was approved on September 8, 1992.
The cost to set up the$80,325 CHFA Bond Security Escrow Fee would not exceed$1,610 and could be financed through
the current loans. The restricted account for the Bond Fee would only need to be in place until close of the permanent
loan.
III. REASONS FOR RECOMMENDATION/BACKGROUND
The State's Rental Housing Construction Program (RHCP) requires that all local funds be expended prior to
disbursement of the RHCP construction funds. Because$277,917 in tax increments from the City of Antioch have been
committed but will not be available before July 1993, Housing Authority staff requested that these City funds be
disbursed as available during construction. RHCP staff indicated that,in this case,the local funds could be expended
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CONTINUED ON ATTACH3v(ENIT: SIGNATURE
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RECOW ENDATION OF EXECUTIVE DIRECTOR REC OAMENDATION OF BOARD COAOMTTEE
APPROVE rrrr-►FR
SIGNATURE(S)
ACTION OF BOARD ON a j APPROVED AS RECOMMENDED OTHER
VOTE OF COMMISSIONERS
OUS(ABSENT) I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT
AYES: NOES: COPY OF AN ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: AHN TTES OF THE BOARD OF COMMISSIONERS ON THE
DATE SHOWN.
ATTESTED �o, /9 LZ"
"
Phil Batchelor,Clerk of the Board of Commissioners
BY G�%/ ,DEPUTY
f
Board of Commissioners
October 20, 1992
Page 2
after some of the RHCP funds were disbursed If all local funds were expended during construction. Upon further
discussion, RHCP returned to its requirement that all local funds be expended first. The City of Antioch will not have
access to those funds until July 1993 and July 1994 nor is it in a position to secure lines of credit for those amounts.
In order to resolve this scheduling problem,staff is recommending that the Authority secure the lines of credit to cover
the $277,917. The project is also required to have a $100,000 contingency set aside. Bank of America State Bank is
willing to increase their loan amount by that amount, secured by a line of credit from the Housing Authority.
Additional reserves required by the construction lenders bring the total to $450,000 for the lines of credit.
In addition, the California Housing Finance Agency (CHFA) requires that each sponsor set aside a Bond
Security Escrow Fee of 3.5%of the CHFA loan amount prior to sale of the CHFA bonds in December 1993. The Bond
Fee,of$80,325 for Casa del Rio,must be set aside until close of the permanent loan. The Bond Fee can be in the form
of cash or a letter of credit or other restricted accounts as approved by CHFA. The Authority is recommending that
a restricted account, with the Authority and CHFA as joint owners and with the stipulation that the funds cannot be
released without signed authorization from CHFA, or a letter of credit be established to cover this fee.
IV. CONSEQUENCES OF NEGATIVE ACTION:
Should the Board of Commissioners elect not to approve Resolution No. 3660 authorizing the Executive
Director to apply for and secure lines of credit tip to $450,000 and to apply for and secure either a restricted account
or a letter of credit for the Bond Escrow Security Fee of$80,325,the Housing Authority will be required to seek another
funding source to cover these fees which could result in a delay of the project.
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THE BOARD OF COMMISSIONERS
THE HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
RESOLUTION NO. 3660
RESOLUTION AUTHORIZING THE ACTING INTERIM EXECUTIVE DIRECTOR
TO SECURE 1 ) LINES OF CREDIT, IN AN AMOUNT NOT TO EXCEED
$450, 000, TO PROVIDE THE REMAINING CASH FROM LOCAL SOURCES
NEEDED AT CLOSE OF ESCROW AND ADDITIONAL FUNDS REQUIRED FOR
PROJECT RESERVES; AND 2) A RESTRICTED ACCOUNT OR A
LETTER OF CREDIT FOR AN $80, 325 BOND SECURITY ESCROW FEE
FOR THE CALIFORNIA HOUSING FINANCE AGENCY PERMANENT
FINANCING FOR THE CASA DEL RIO SENIOR HOUSING DEVELOPMENT
WHEREAS, the Housing Authority of the County of Contra Costa
(Authority) is developing Casa del Rio, an 82-unit very
low income senior housing project, in Antioch,
California; and
WHEREAS, the State' s Rental Housing Construction Program (RHCP) ,
one of the construction lenders, is requiring that all
local funds be expended prior to disbursement of any RHCP
funds for the project; and
WHEREAS, the City of Antioch has committed a total of $277,917 in
tax increment funding for the construction costs but will
not have accrued these funds before July 1993; and
WHEREAS, in order to resolve this scheduling problem, the Housing
Authority can secure lines of credit for that amount from
Housing Authority funds currently on deposit in accounts
at Bank of America and provide the cash needed at close
of escrow; and
WHEREAS, the City of Antioch will reimburse the Housing Authority
for $162,917 in July 1993 and $115,000 in July 1994 when
the committed tax increments will be, available; and
WHEREAS, the lender's are now requiring that the Authority provide
$72,083 in additional reserves and set aside $100,000 for
a construction contingency; and
WHEREAS, Bank of America State Bank is willing to increase its
loan amount to cover these additional costs if they are
secured through a line of credit from current Housing
Authority accounts; and
WHEREAS, the total amount of lines of credit to cover the City tax
increments, the contingency, and the additional reserves
would not exceed $450, 000; and
WHEREAS, because the City will reimburse the Authority for its
share ( $277,917 ) and the $100, 000 contingency set aside
is not anticipated to be expended, the remainder, or
$72, 083, would be a cost to the Authority beyond the
$.150, 000 authorized under Resolution No. 3651, which was
passed on September 8, 1992; and
WHEREAS, the California Housing Finance Agency (CHFA) requires
that the Authority, as the sponsor, set aside a Bond
Security Escrow Fee equal to 3 .5% of the CHFA loan
amount, or $80,325, prior to sale of CHFA's bonds in
December 1993; and
WHEREAS, the Bond Fee must be in the form of cash, a letter of
credit, or other restricted accounts approved by CHFA and
must be set,, aside until close of the permanent loan; and
WHEREAS, the Authority is recommending that either a restricted
account, with the Authority and CHFA as joint owners and
with the stipulation that the funds cannot be released
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without written authorization from CHFA, or a letter of
credit be established to cover the $80, 325 Bond Fee; and
WHEREAS, the Acting Interim Executive Director will act on behalf
of the Housing Authority of the County of Contra Costa
and apply for and secure the lines of credit and the
restricted accounts required to cover these costs and
fees;
NOW, THEREFORE, BE IT RESOLVED, as follows:
1 . That the Board of Commissioners of the Housing
Authority of the County of Contra Costa hereby
authorizes the Acting Interim Executive Director of
the Housing Authority to apply for and secure lines
of credit, in an amount not to exceed $450,000, to
provide the remaining cash from local sources
needed at the close of escrow and the additional
costs now required by the lenders .
2 . That the Board of Commissioner of the Housing
Authority of the County of Contra Costa hereby
authorizes the Acting Interim Executive Director of
the Housing Authority to establish either a
restricted account or a letter of credit for the
CHFA Bond Security Escrow Fee of $80, 325 .
2 . That this resolution shall take effect immediately.
PASSED AND ADOPTED THIS 20th day of October , 19 92 , by the
following vote of the Commissioners:
AYES: Commissioners Powers, Fanden, Torlakson, McPeak
NOES: None
ABSENT: Commissioner Schroder
ABSTAIN: None
I hereby certify that this is a true and correct copy of
cc: County Administrator an action taken and entered on the minutes of tha
County Counsel Boar+of Supervi rs on th date shown.
Housing Authority ATTESTED: - JAJ
(�a, I�i�dam.
PHIL BATCHELOR,Clerk of the Board
of Supervisors and County Administrator
by _ ��� � ,Deputy
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