>> HI, EVERYONE. MICS ARE HOT, AND THEY'RE HOT THROUGHOUT THE WHOLE MEETING. [Board Meeting on September 5, 2024.] [00:00:08] CEREMONIAL [NOISE]. I'D LIKE TO CALL THE ORDER OF THE MEETING OF THE GOVERNING BOARD OF THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS. IT IS 10:01 IN THE MORNING ON SEPTEMBER 5TH, 2024. THANK YOU ALL FOR COMING TO THIS DIFFERENT, FROM OUR PERSPECTIVE, COZY LOCATION HERE. I THINK WE'RE GOING BACK TO THE OTHER MEETING ROOM NEXT MONTH. >> THE CAPITOL. >> THE CAPITOL? I LEARN SOMETHING NEW EVERYDAY. LET'S START OUT WITH OUR ROLL CALL. MR. MARCHANT? >> I AIN'T HERE. >> ENTHUSIASTICALLY HERE. MS. FARIAS? >> HERE. >> MR. THOMAS? >> HERE. >> MR. HARPER? >> HERE. >> MISS CONROY? >> HERE. >> WE ARE ALL PRESENT IN ACCOUNTED FOR. AS USUAL, WE WILL START OUT WITH THE PLEDGES. YOU WOULD THINK THAT THE UNIVERSITY OF TEXAS WOULD KNOW WHICH SIDE THE AMERICAN FLAG IS SUPPOSED TO AT. >> ALLEGIANCE]. >> WE'RE GOING TO START OUT WITH A RESOLUTION READ BY MR. LYTTLE, RECOGNIZING OCTOBER AS ENERGY AWARENESS MONTH, COMING UP. MR. LYTTLE? >> THANK YOU, MR. CHAIRMAN. THE RESOLUTION IN YOUR BOARD MATERIALS READS AS FOLLOWS. RESOLUTION RECOGNIZING OCTOBER AS ENERGY AWARENESS MONTH. WHEREAS THE US DEPARTMENT OF ENERGY, DOE, HAS DESIGNATED OCTOBER 2024 AS NATIONAL ENERGY AWARENESS MONTH. WHEREAS THE WEATHERIZATION ASSISTANCE PROGRAM, THE NATION'S LARGEST RESIDENTIAL ENERGY EFFICIENCY PROGRAM, WAS ESTABLISHED BY DOE IN 1976 TO MAKE HOMES MORE ENERGY EFFICIENT, SAFER, AND HEALTHIER FOR THOSE WITH LOW AND MODERATE INCOMES. WHEREAS THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS ADMINISTERS A WEATHERIZATION ASSISTANCE PROGRAM FUNDED WITH BOTH DOE FUNDS AND LOW INCOME HOME ENERGY ASSISTANCE PROGRAM FUNDS, WHICH IS OPERATED BY A NETWORK OF PRIVATE NON PROFITS, AND LOCAL GOVERNMENT ENTITIES. WHEREAS THE TEXAS WEATHERIZATION ASSISTANCE PROGRAM HAS INTRODUCED MILLIONS OF DOLLARS INTO COMMUNITIES TO IMPROVE THOUSANDS OF HOMES, THEREBY HELPING TEXANS, INCLUDING ELDERLY, DISABLED, OR FAMILIES WITH YOUNG CHILDREN CONSERVE ENERGY AND REDUCE UTILITY COSTS. WHEREAS THE PROGRAM CONDUCTS COMPUTERIZED ENERGY AUDITS AND USES ADVANCED DIAGNOSTIC TECHNOLOGY, INVESTING AS MUCH AS $20,000 IN A HOME, AND PROVIDING AN ARRAY OF IMPROVEMENTS THAT INCLUDE WEATHER STRIPPING OF DOORS AND WINDOWS, PATCHING CRACKS AND HOLES, INSULATING WALLS, FLOORS, AND ATTICS, REPLACING DOORS, WINDOWS, REFRIGERATORS, AND WATER HEATERS, AND REPAIRING HEATING AND COOLING SYSTEMS, WHEREAS THE WEATHERIZATION EFFORTS CONTRIBUTE TO THE STATE'S ECONOMIC, SOCIAL, AND ENVIRONMENTAL PROGRESS BY CREATING JOBS, PROMPTING THE PURCHASE OF GOODS AND SERVICES, IMPROVING HOUSING, STABILIZING NEIGHBORHOODS, REDUCING EMISSIONS, AND DECREASING THE RISK OF FIRES. NOW, THEREFORE, IT IS HEREBY RESOLVED THAT THE TDHCA GOVERNING BOARD DOES HEREBY CELEBRATE OCTOBER 2024 AS ENERGY AWARENESS MONTH IN TEXAS. >> THANK YOU, MR. LYTTLE. THE RESOLUTION WILL BE ENTERED OFFICIALLY INTO THE RECORD. WE ARE GOING TO START OUT WITH THE EXECUTIVE DIRECTOR'S REPORT FROM MR. WILKINSON. THEN I AM GOING TO TAKE ONE ITEM OUT OF ORDER. I THINK JUST DUE TO HAVING A STATE REPRESENTATIVE HERE WITH US TODAY, SO OUT OF COURTESY, WE WON'T MAKE YOU WAIT THREE HOURS TILL WE GET TO YOUR REPORT. WE WILL GO TO THE CONSENT AGENDA FIRST BEFORE WE DO ALL THE REST OF THAT. THE CONSENT AGENDA HAS BEEN PUT INTO THE BOARD BOOK. DO ANY BOARD MEMBERS HAVE QUESTIONS OR WANT TO MOVE A CONSENT ITEM TO ACTION? OR DO ANY MEMBERS OF THE PUBLIC WISH TO REMOVE SOMETHING FROM THE CONSENT AGENDA? HEARING NONE, I'LL ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA AS PRESENTED. [00:05:07] >> MR. CHAIRMAN, I MOVE THE BOARD APPROVE ITEMS 1 THROUGH 16 AS DESCRIBED AND PRESENTED IN THE RESPECTIVE BOARD REQUEST AND REPORTS. >> GREAT. THANK YOU. MOTION MADE BY MS. FARIAS. IS THERE A SECOND? >> SECOND. >> SECONDED BY MR. HARPER. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSED? HEARING NONE, MOTION CARRIES. NOW, MOVING ON TO ITEM 17, THE EXECUTIVE DIRECTOR'S REPORT. MR. WILKINSON? >> THANK YOU, CHAIRMAN. LAST WEEK, I WAS JOINED BY DAVID CERVANTES, OUR CFO, AS WE PRESENTED TDCA'S FISCAL YEAR '26/'27 LEGISLATIVE APPROPRIATIONS REQUEST TO REPRESENTATIVES FROM THE OFFICES OF THE GOVERNOR, LIEUTENANT GOVERNOR, SPEAKER, THE HOUSE, AND LEGISLATIVE BUDGET BOARD. IT'S BASICALLY STAFF ON THE DIAS. IT'S A DRY RUN. I USED TO BE ON THE OTHER SIDE OF IT. WE DIDN'T GET ANY QUESTIONS, BUT IT WENT WELL. IT'S GOOD PRACTICE FOR EVERYBODY. GAVE OUR GOVERNOR'S ADVISOR, CHAIRED IT. ALLOWED US TO HIGHLIGHT SOME OF THE DEPARTMENT SUCCESSES FROM THE PAST YEAR AS WELL AS RAISE AWARENESS OF REQUESTS WE MADE IN THE LAR. AS A REMINDER, WE DON'T HAVE ANY GENERAL REVENUE EXCEPTIONAL ITEMS THAT WE'RE ASKING FOR. WE'RE ASKING FOR AUTHORITY TO SPEND OUR FEDERAL AND APPROPRIATE RECEIPTS ON SOME SOFTWARE UPGRADES AND SOME MORE STAFF IN KEY AREAS TO SPEED THINGS UP FOR THE INDUSTRY. MR. LYTTLE HAS ALSO BEEN IN MEETINGS WITH VARIOUS LEGISLATIVE OFFICES ABOUT OUR LAR AND THE NEEDS WE IDENTIFIED IN OUR BUDGET REQUEST. WE'RE NOT REALLY SEEKING OUT OCCASIONALLY MEMBERS THAT ARE INTERESTED IN HOUSING OR WANTING TO TALK TO US. ON A DIFFERENT NOTE, I WILL BE REPRESENTING THE DEPARTMENT TOMORROW AT A ROUNDTABLE DISCUSSION ON HOMELESSNESS POLICY SOLUTIONS BEING SPONSORED BY SENATOR TAN PARKER. FROM WHAT WE HEAR, THE SENATOR IS BRINGING TOGETHER A WIDE RANGING GROUP OF ADVOCATES AND POLICYMAKERS TO IDENTIFY ACTIONABLE STEPS THAT CAN MAKE A MEANINGFUL IMPACT GOING INTO THE NEXT LEGISLATIVE SESSION. ODDLY ENOUGH, IT'S HOUSED AT THE GOOGLE BUILDING, THE BIG SALE LOOKING ONE. I'M CURIOUS. I HEAR THERE'S FREE SANDWICHES, SO I'M EXCITED. SECTION 811 PROGRAM. BACK IN MID AUGUST, HUD ANNOUNCED ITS SECTION 811 PROJECT RENTAL ASSISTANCE FOR PERSONS WITH DISABILITIES PROGRAM AWARDS. WE'RE EXCITED FOR THE NEWS THAT TEXAS RECEIVED THE MAX AWARD OF EIGHT MILLION. THIS IS ON TOP OF THE DOZEN SOMETHING MILLION WE WERE ALREADY RUNNING. THIS WILL HELP US CONTINUE TO REFER LOW INCOME PERSONS WITH DISABILITIES TO ELIGIBLE HOMES AND TO PROVIDE THEM WITH RENTAL ASSISTANCE AND SUPPORTIVE SERVICES. COLONIA INITIATIVES. ALBERT ALVIDREZ, OUR OFFICE OF COLONIA INITIATIVES ADMINISTRATOR, REPORTS LAST THURSDAY, TDHCA CONVENING A COLONIA RESIDENT ADVISORY COMMITTEE MEETING IN CAMERON COUNTY. MEMBERS FROM THE EIGHT COLONIA SELF-HELP CENTERS GATHER TO DISCUSS THE NEEDS OF THE RESPECTIVE COLONIAS. PROPOSALS FROM WEBB, VALVERDE, MAVERICK, AND HIDALGO COUNTIES WILL BE PRESENTED TO YOU NEXT MONTH. THESE PROPOSALS WILL OUTLINE ACTIVITIES UNDER NEW CONTRACTS, INCLUDING TOOL ENDING LIBRARY OPERATION, TECHNOLOGY CENTER OPERATION, PROPERTY TITLING SERVICES, CONSTRUCTION SKILL CLASSES, SOLID WASTE COLLECTION, RECONSTRUCTION, REHABILITATION, AND NEW CONSTRUCTION INITIATIVES. I'LL BE LOOKING FOR THAT NEXT MONTH. FOR SINGLE FAMILY AND HOMELESS PROGRAMS, ON JULY 18, HUD RELEASED A FEDERAL REGISTERED NOTICE, IMPLEMENTING THE NEW RAPID UNSHELTERED SURVIVOR HOUSING PROGRAM, RUSH. RUSH IS AWARDED UNDER THE EMERGENCY SOLUTIONS GRANT PROGRAM TO STATES AND UNITS OF LOCAL GOVERNMENTS AFTER DISASTERS FOR PERSONS EXPERIENCING OR AT-RISK OF HOMELESSNESS, WHO HAVE BEEN RESIDING IN A DECLARED DISASTER AREA AND HAVE NEEDS THAT AREN'T OTHERWISE FULLY MET BY AN EXISTING FEDERAL OR STATE PROGRAM. THIS IS NOT A NEW ALLOCATION OF FUNDS. RUSH IS FUNDED ONLY BY RECAPTURED FUNDS FROM THE ESG AND CONTINUUM OF CARE PROGRAM. THE STATE OF TEXAS RECEIVED AN INITIAL ALLOCATION OF 1.8 MILLION IN RESPONSE TO HURRICANE BERYL AND OTHER SEVERE WEATHER EVENTS IN THE STATE THIS YEAR. HUD WAIVED CONSULTATION REQUIREMENTS FOR AN INITIAL ALLOCATION OF RUSH, BUT THE GRANTEES MUST PUBLISH AN AMENDMENT TO THEIR ACTION PLAN WITHIN 30 DAYS OF NOTIFICATION OF AN ALLOCATION OF RUSH. BECAUSE WE RECEIVED THIS NEWS JUST IN THE LAST WEEK, IT DIDN'T GIVE STAFF THE TIME TO TAKE AMENDMENTS OR FUNDING PLANS TO YOU PRIOR TO RELEASING A PLAN. STAFF IS WORKING ON AN AMENDMENT TO THE ONE-YEAR ACTION PLAN, WHICH WILL BE SUBMITTED TO HUD AND BROUGHT TO YOU NEXT MONTH FOR RATIFICATION, AS A RESPONSE TO HUD IS DUE ON SEPTEMBER 27, PRIOR TO THE OCTOBER MEETING. WE'LL ALSO PROVIDE YOU NEXT MONTH WITH A BOARD ITEM DETAILING HOW WE'LL HANDLE SUBSEQUENT ALLOCATIONS OF RUSH. CHAIRMAN AND THE BOARD, THAT CONCLUDES MY REMARKS FOR THIS MONTH'S REPORT, [00:10:02] AND I'M HAPPY TO ANSWER ANY QUESTIONS. >> GREAT. THANK YOU, BOBBY. ANY MEMBERS HAVE QUESTIONS FOR MR. WILKINSON? HEARING NONE, THANK YOU FOR THAT REPORT. WE WILL MOVE ON WITH THE AGENDA. HOWEVER, AGAIN, WE ARE GOING TO TAKE ITEM 35 OF THE AGENDA FIRST. FOR PRESENTATION, DISCUSSION, AND POSSIBLE ACTION ON A REQUEST FOR RETURN AND REALLOCATION OF TAX CREDITS UNDER TEN TEXT SECTION 11.65, RELATED CREDIT RETURNS, RESULTING FROM FORCE MAJEURE REQUEST FOR THE COMMONS AT ST. ANTHONY'S. CODY, YOU WILL BE PRESENTING? >> YES. CAN YOU HEAR ME IF I DO THIS? GREAT. THEY GAVE ME A WIRELESS MICROPHONE. >> ACTUALLY, BEFORE WE DO THIS, SO EVERYONE KNOWS THAT THERE'S A DIFFERENT LAYOUT TODAY. AS USUAL, IF YOU'RE GOING TO PLAN ON SPEAKING ON AN ITEM COMING UP ON THE AGENDA, I'LL ASK YOU TO COME UP INTO THE FRONT SEATS HERE. THE MICROPHONE IS HERE AT THE DIAS. NANCY HERE IN THE FRONT ROW HAS THE SIGN IN SHEET. SO COME UP, SIGN IN. WAVE, NANCY. MAKE SURE YOU SIGN IN YOUR NAME AND WHO YOU'RE REPRESENTING. MICROPHONE UP HERE. THE TIMING IS GOING TO BE KEPT. WE DON'T HAVE OUR LITTLE GREEN LIGHT RED LIGHT SOON, SO WE'LL HEAR THE BUZZ, WE GET TO PICK THREE MINUTES. WITH THAT, MR. CAMPBELL. >> THANK YOU VERY MUCH. THE FIRST ITEM, ACTUALLY, I GUESS THAT WE'RE DOING TODAY IS, A FORCE MAJEURE REQUEST FOR THE COMMONS AT ST. ANTHONY'S. THIS IS A HIGHLY COMPLEX ADAPTIVE REUSE OF A HOSPITAL IN AMARILLO TO CREATE 124 UNITS OF AFFORDABLE HOUSING. THE PROJECT WAS INITIALLY AWARDED HOUSING TAX CREDITS IN 2020, AND THE BOARD HAS SINCE GRANTED THE DEVELOPMENT AN EXTENSION UNDER THE FORCE MAJEURE RULE TWICE, ONCE IN 2021, AND AGAIN IN 2022. THIS IS THE FIRST REQUEST FOR A THIRD EXTENSION THAT THIS BOARD HAS SEEN. IT IS DIFFICULT TO SUMMARIZE EVERYTHING THAT HAS HAPPENED TO THIS DEVELOPMENT IN ANY WAY EXCEPT TO SAY THAT EVERYTHING HAS HAPPENED TO THIS DEVELOPMENT. IT WAS AWARDED TAX CREDITS EARLY IN THE PANDEMIC AND HAS EXPERIENCED THE TUMULTUOUS CONDITIONS RELATED TO SUPPLY CHAINS AND LABOR SHORTAGES THAT CAME WITH THAT. IT HAS EXPERIENCED SEVERAL MAJOR FREEZE EVENTS. IT HAS TWICE EXPERIENCED COST INCREASES SO DRAMATIC THAT ADDITIONAL FUNDING HAD TO BE SECURED, ONCE FROM TDHCA IN THE FORM OF A TWO MILLION DOLLAR NATIONAL HOUSING TRUST FUND LOAN, AND THEN LATER IN THE FORM OF 1.5 MILLION IN HOME-ARP AND A 10-YEAR TAX REBATE FROM LOCAL GOVERNMENTS. DUE TO THE HISTORIC TAX CREDITS, IT HAS EXPERIENCED DIFFICULTIES RELATED TO THE EXTREMELY DETAILED REQUIREMENTS RELATED TO HISTORIC PRESERVATION. DUE TO THE BUILDING'S AGE, IT HAS EXPERIENCED DELAYS RELATED TO UNEXPECTED ADDITIONS TO THE SCOPE OF THE REHABILITATION, INCLUDING UNEXPECTED MOLD REMEDIATION AND ROOF REPAIRS, AND MOST RECENTLY AND MOST APPLICABLE TO THIS REQUEST, IT LOST ITS ELECTRICAL SUBCONTRACTOR DUE TO A LACK OF AVAILABLE LABOR IN THE PANHANDLE. THIS HAS ALSO CAUSED DELAYS IN ELECTRICAL WORK AND DELAYS TO THE DELIVERY OF THE SWITCH GEAR AND BACKUP EMERGENCY GENERATOR, WHICH ARE CURRENTLY SCHEDULED TO BE DELIVERED IN NOVEMBER OF 2024. WITH THIS DELIVERY DATE, CONSTRUCTION CANNOT BE COMPLETED UNTIL APRIL, WHICH IS FOUR MONTHS AFTER THE CURRENT PLACED IN-SERVICE DEADLINE. THE DEVELOPER HAS REQUESTED AN ADDITIONAL SIX-MONTH EXTENSION TO ALLOW FOR CONSTRUCTION TO COMPLETE. AS YOU MIGHT EXPECT, DETERMINING A RECOMMENDATION ON THIS ITEM WAS A LITTLE MORE DIFFICULT THAN THE STANDARD REQUESTS THAT WE PRESENT TO YOU. IT IS IMPOSSIBLE TO GET AROUND THE FACT THAT THIS IS THE THIRD REQUEST FOR THIS DEVELOPMENT. BUT THE DELAYS THAT THE DEVELOPMENT HAVE EXPERIENCED ARE CLEARLY QUALIFYING EVENTS UNDER THE RULES, AND QUITE FRANKLY, I'M NOT SURE WHAT ELSE THESE PEOPLE COULD HAVE DONE TO HAVE MET THE PLACED IN-SERVICE DEADLINE. IT'S JUST BEEN A SERIES OF UNFORTUNATE EVENTS THAT I DON'T SEE HOW THEY POSSIBLY COULD HAVE PREVENTED. THEY ARE 70% COMPLETED NOW. THEY'VE REPRESENTED TO US A REALISTIC TIMELINE OF PLACING IN-SERVICE BY APRIL OF 2025. BECAUSE OF THIS, STAFF IS RECOMMENDING THAT YOU DO APPROVE THIS REQUEST TODAY. >> MR. CAMPBELL, I HAVE A LITTLE DISAGREEMENT ON YOUR CHARACTERIZATION THAT ALL THESE EVENTS WERE CLEARLY OUT OF THE DEVELOPER'S CONTROL. >> CERTAINLY. >> LET'S GO AHEAD I GUESS WE HAVE SOME SPEAKERS ON THIS? >> YES, SIR. >> AS THE FIRST SPEAKER IS COMING UP, AND MAKE SURE HE'S SIGNING BEHIND YOU, I'LL ENTERTAIN A MOTION UNDER THE EQUALS RULE TO ENTERTAIN PUBLIC COMMENT DURING THIS MEETING. IS ANYONE SO MOVE? [00:15:01] >> MOVED. >> MOVED BY MR. MARCHANT. >> SECOND. >> SECONDED BY MS. FARIAS. ALL IN FAVOR, SAY AYE. >> AYE. >> ANY OPPOSED? WE WILL HEAR PUBLIC COMMENT TO THIS. IT'S NOT REALLY THE EQUALS RULE. >> GOOD TO GO? >> THERE WE GO. >> THANK YOU. DAN DIFRANCESCO WITH COMMONWEALTH DEVELOPMENT. WE ARE THE CO DEVELOPER WITH KRS HOUSING ON THIS PROJECT. BEFORE I SPEAK, I'D LIKE TO HAVE A REPRESENTATIVE FOR PRICE SPEAK AND THEN MR. JOHN DALLAS, WHO'S THE CHIEF OF STAFF FOR SENATOR SPARKS. I'LL LET THEM HAVE THE FLOOR FIRST, AND THEN I'LL GO FROM THERE. >> OKAY. >> I THINK IT'S STILL ON. >> IS IT ON? >> YEAH. >> MR. CHAIRMAN, MEMBERS, THANK YOU FOR THE OPPORTUNITY TO TESTIFY BEFORE YOU TODAY. MY NAME IS FOUR PRICE. I'M THE STATE REPRESENTATIVE FOR HOUSE DISTRICT 87. I'M HERE TESTIFYING IN SUPPORT OF THE APPLICATION TO EXTEND TIME FOR THE COMPLETION OF THIS PROJECT. AS YOU HEARD IN THE SUMMARY, THE COMMONS AT ST. ANTHONY'S IS A MAJOR PROJECT IN THE HOUSE DISTRICT THAT I REPRESENT. IN FACT, IT'S IN MY HOME COUNTY, POTTER COUNTY, IN THE CITY OF AMARILLO. IT'S LOCATED IN AN AREA OF THE CITY THAT IS ECONOMICALLY DISADVANTAGED, AND IT HAS NOT SEEN A PROJECT OF THIS SIZE OR SCOPE IN DECADES, PROBABLY 30 YEARS OR MORE. THIS HOSPITAL HISTORIC BUILDING IS SITUATED IN AN AREA OF TOWN THAT REALLY NEEDS THIS PROJECT. AS YOU HEARD, IT'S ALMOST THREE QUARTERS OF THE WAY COMPLETE AS WE SIT HERE TODAY. THIS PROJECT IS SO IMPORTANT TO THE AREA. IT'S SO IMPORTANT TO OUR COMMUNITY. I DON'T KNOW HOW OFTEN YOU HAVE STATE REPRESENTATIVES OR MEMBERS OF THE LEGISLATURE TESTIFY BEFORE YOU, BUT I'M MOTIVATED TO BE HERE TODAY AND DRIVE 505 MILES TO TESTIFY BEFORE YOU. IT'S AN IMPORTANT PROJECT FOR US. I'VE TALKED TO THE MAYOR. I'VE TALKED TO THE COUNTY JUDGE FOR POTTER COUNTY. YOU'LL HEAR FROM SENATOR SPARKS OFFICE WHO I KNOW SUPPORTS THIS PROJECT. I'VE TALKED TO REPRESENTATIVE JOHN SMITHEE WHO SUPPORTS THIS PROJECT. THERE IS NO ONE IN AREA OF LEADERSHIP THAT IS NOT BEHIND THIS PROJECT. IT'S IMPORTANT ECONOMICALLY TO THE CITY OF AMARILLO AND TO POTTER COUNTY SPECIFICALLY. AS YOU HEARD, THERE WERE DELAYS, SOME OF WHICH I DON'T THINK WE WOULD HAVE ANTICIPATED IN THE BEGINNING WITH THE PANDEMIC. SUPPLY CHAIN. I CAN PERSONALLY TELL YOU THE REFERENCE TO THE TROUBLE WITH THE WORKFORCE IS NOT AN UNCOMMON SITUATION IN THE TEXAS PANHANDLE. YOU PROBABLY KNOW, WE HAVE IN THE CITY OF AMARILLO, EITHER THE LOWEST OR THE SECOND LOWEST UNEMPLOYMENT RATE VERY CONSISTENTLY IN THE STATE OF TEXAS. WE HAVE A SHORTAGE OF LABOR ACROSS ALL FIELDS. BUT RIGHT NOW IN THE CITY OF AMARILLO, WE HAVE CONCURRENT CONSTRUCTION AND HAVE JUST UNDERGONE THROUGHOUT THE LAST YEAR CONSTRUCTION OF AN AMAZON DISTRIBUTION CENTER, ONE OF THE LARGEST IN THE COUNTRY. WE ALSO AT THE VERY SAME TIME HAVE A LARGE, IF NOT THE LARGEST, BUC-EE'S CONVENIENCE STORE BEING CONSTRUCTED LITERALLY JUST MILES AWAY FROM THIS HOSPITAL. FOR THERE TO BE COMPETING NEEDS IS AN UNDERSTATEMENT FOR CONTRACTORS AND WORKERS AVAILABLE IN AMARILLO. NOT THAT THERE AREN'T ANY, IT'S JUST THAT DEMAND IS HIGH AT THE SAME TIME THAT THIS IS NEARING COMPLETION. I ALSO JUST WANT TO SAY THAT THE PROJECT, I THINK, WOULD HAVE JUST AN INCREDIBLE IMPACT ON OUR COMMUNITY. I DON'T KNOW ANYBODY THAT IS NOT EXCITED ABOUT ITS COMPLETION. I SAID JUST A FEW MONTHS, WE'RE ALMOST 75%, AS I UNDERSTAND IT, FROM BEING FINISHED. THE HISTORICAL NATURE OF THAT BUILDING, IT'S 122-YEARS-OLD. FOR THERE TO BE UNFORESEEN PROBLEMS WITH REMEDIATION, WITH GETTING APPROVAL TO MAKE THINGS HISTORICALLY ACCURATE IN THAT BUILDING IS NOT ALSO UNCOMMON. I'M SURE THAT YOU CAN UNDERSTAND THAT. I JUST ASK YOUR FAVORABLE OPINION ABOUT THE EXTENSION OF TIME. I'M HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE. >> REPRESENTATIVE PRICE, WE APPRECIATE YOU COMING DOWN. >> THANK YOU, MR. CHAIRMAN. >> SPEAKING BEFORE THE BOARD. IS THE SITUATION IN AMARILLO THAT MUCH WORSE THAN AROUND THE REST OF THE STATE AS FAR AS LABOR AND CONTRACTORS AND SUCH? BECAUSE THIS IS PRETTY MUCH THE ONLY 2020 AWARD THAT STILL HAS NOT BEEN FIXED. [00:20:03] >> I UNDERSTAND THE UNUSUAL NATURE OF THIS REQUEST. I UNDERSTAND THAT THE THIRD EXTENSION OF TIME IS IRREGULAR, TO PUT IT MILDLY. I THINK TO ANSWER YOUR QUESTION, MR. CHAIRMAN, WE'RE NOT ANY DIFFERENT, I WOULD SAY, WILDLY THAN THE REST OF THE STATE. TEXAS IS A VERY POPULAR PLACE TO BE RIGHT NOW WITH LOTS OF BUSINESSES AND LOTS OF FAMILIES MOVING INTO THE STATE. RECORD NUMBERS, ACTUALLY. THE DEMOGRAPHERS WILL TELL YOU THAT WE HAVE RECORD POPULATION GROWTH. IN AREAS LIKE AMARILLO, WE'VE EXPERIENCED THAT GROW JUST LIKE EVERY OTHER COMMUNITY. HOWEVER, IN THE TEXAS PANHANDLE, AMARILLO IS THE LARGEST METROPOLITAN AREA. CONTRACTORS IN AMARILLO NOT ONLY SERVE AMARILLO, BUT ALSO SERVE THE 26 COUNTIES OF THE PANHANDLE VERY SIGNIFICANTLY. THERE AREN'T A WHOLE LOT OF COMMUNITIES THAT HAVE THE SAME TYPE OF WORKFORCE AND EMPLOYERS THAT AMARILLO HAS. I WOULDN'T CHARACTERIZE IT AS BEING DIFFERENT THAN THE REST OF THE STATE, BUT I DO THINK IT HAS SOME UNIQUE CHARACTERISTICS WHERE THE DEMAND ON THOSE CONTRACTORS AND CERTAIN TRAINED SKILLED LABOR WORKERS IS VERY DIFFICULT TO COMBINE IN SOME CIRCUMSTANCES. WE JUST HAVE THAT CONGRUENCE OF SITUATIONS WHERE A LOT OF COMPETING PROJECTS FOR THOSE FOLKS ARE OCCURRING AT THE SAME TIME. >> WE UNDERSTAND. AT THE SAME TIME, WE'RE LOOKING AT THIS IN A PROGRAMMATIC CONTEXT AND STATEWIDE. JUST RAISES A LOT OF CONCERNS WE'RE AT THIS POINT AGAIN. BUT AGAIN, WE DEFINITELY RECOGNIZE THE IMPORTANCE OF HOUSING NEEDS THERE IN THE AMARILLO AREA AND WANT TO BE AS ACCOMMODATING AS WE CAN BE. >> I APPRECIATE THAT. THANK YOU FOR YOUR COURTESY TODAY ON THE SCHEDULING. I APPRECIATE THAT TOO. >> GREAT. THANK YOU. >> THANK YOU. >> ANYONE ELSE HAVE ANY QUESTIONS FOR REPRESENTATIVE PRICE? WE APPRECIATE YOUR TIME. >> THANK YOU, MR. CHAIRMAN. >> NEXT. >> THANK YOU. >> MORNING, MR. CHAIRMAN AND BOARD MEMBERS. I'M JOHN DALLAS, THE CHIEF OF STAFF FOR SENATOR KEVIN SPARKS. THE SENATOR IS ACTUALLY TRAVELING ON BUSINESS TODAY, STATE BUSINESS IN AMARILLO, SO HE IS APOLOGETIC THAT HE COULD NOT BE HERE TODAY, BUT HE DID WANT TO PASS ON THAT HE IS AWARE OF ALL THE CHALLENGES WITH THE PROJECT AND CERTAINLY UNDERSTANDS WHY THOSE THINGS ARE HAPPENING. BUT HE WANTED TO AGAIN PASS ON JUST LIKE REPRESENTATIVE PRICE HIS FULL SUPPORT FOR THE PROJECT. HE UNDERSTANDS HOW IMPORTANT IT IS TO AMARILLO AND TO THE ECONOMY. BUT I JUST WANTED TO MAKE SURE THAT HIS VOICE WAS HEARD TODAY THAT HE IS ALSO IN FULL SUPPORT OF THE ENTIRE DEVELOPMENT. >> THANK YOU. ANY QUESTIONS? WE APPRECIATE SENATOR SPARKS. >> THANK YOU. >> THANK YOU. AGAIN, DAN DIFRANCESCO WITH COMMONWEALTH DEVELOPMENT, THE CO-DEVELOPER WITH KRS HOUSING. CAN GET A LITTLE BIT MORE INTO THE DETAILS, IF YOU LIKE, AND HERE TO ANSWER QUESTIONS, BUT PRIMARILY, AGAIN, THIS IS A HISTORIC ADAPTIVE REUSE PROJECT. IT'S OVER 250,000 SQUARE FEET, CERTAINLY ONE OF THE LARGEST PROJECTS I'VE EVER BEEN A PART OF FOR A HISTORIC BUILDING OF THIS MAGNITUDE. WITH THAT, IT'S DEFINITELY DIFFERENT THAN YOUR TYPICAL NEW CONSTRUCTION BUILD. WHEN YOU'RE GETTING INTO THE BUILDING WITH THE INTERIOR DEMOLITION, THE GENERAL CONTRACTOR DOES ACCOUNT FOR THE ASBESTOS REMOVAL, THE MOLD REMEDIATION, AND THEY HAVE THOSE ENVIRONMENTAL REPORTS AND WHEN YOU CLOSE, BUT YOU TRULY DON'T KNOW WHAT'S BEHIND THE WALLS UNTIL YOU START THAT INTERIOR DEMOLITION. THE ORIGINAL CONSTRUCTION SCHEDULE HAD NINE MONTHS, AND THEN WHEN THEY WERE STARTING THE INTERIOR DEMOLITION, THEY NOTICED THAT THERE WAS ADDITIONAL MOLD BEHIND THE EXISTING WALLS THAT YOU JUST COULD NOT ACCOUNT FOR. THAT ADDED TWO MONTHS. AGAIN, IN THE GRAND SCHEME OF THINGS, TIME JUST ADDS UP AND THEN THAT PUSHES BACK THE FRAMERS AND YOUR ELECTRICAL, YOUR MECHANICAL AND PLUMBING SUBCONTRACTORS TO GET IN THERE UNTIL YOU TRULY HAVE A CLEAN BUILDING BECAUSE YOU DO NOT WANT MOLD, THE ASBESTOS POPPING UP FIVE YEARS DOWN THE ROAD. YOU REALLY NEED TO BE ON YOUR GAME TO MAKE SURE ALL THAT'S CLEAN AND GET SIGNED OFF FROM THE PROPER ENVIRONMENTAL TEAM. >> THAT ACCOUNTED FOR THE EXTRA TWO MONTHS? >> IN THE BEGINNING. CORRECT. IF WE GO BACK ON THE FIRST MAJEURE, IT WAS DUE TO COVID AND AS EVERYONE RECEIVED THAT FIRST FORCE MAJEURE. THE SECOND FORCE MAJEURE WAS WHEN EVERYONE ELSE WAS SEEING CONSTRUCTION PRICE RISING AND CONTINUE RISE. WHEN WE RECEIVED THAT, [00:25:01] YOUR CONSTRUCTION WENT BACK OUT TO BID, YOU HAD ANOTHER GAP. THEN WE WERE FORTUNATE TO RECEIVE NATIONALIZING TRUST FUNDS FROM TDHCA. WE REBID IT OUT AGAIN. WE HAD ANOTHER GAP. THANKFULLY, WE HAD THE CITY AND COUNTY WHO CONTINUED TO WANT TO SEE THIS PROJECT MOVE FORWARD. WE WERE ABLE TO SECURE THAT FINANCING IN MARCH OF 2022. WE KNEW WITH THE CONSTRUCTION SCHEDULE, WE JUST WERE NOT GOING TO GET THAT COMPLETED, SO WE WANTED TO BE PROACTIVE TO THE BOARD KNOWING, HEY, THIS IS A 24-MONTH CONSTRUCTION SCHEDULE. THERE'S NO WAY WE'RE GOING TO GET IT PLACED IN SERVICE BY 2023. THEN WE WERE FORTUNATE TO RECEIVE THAT SECOND FORCE MAJEURE REQUEST. LATER ON THAT YEAR, THE TREASURY DID ANNOUNCE THAT THEY WERE GOING TO AUTOMATICALLY EXTEND THE PLACED IN SERVICE FOR PROJECTS DURING THAT TIME. WE WERE, AGAIN, I BELIEVE, PROACTIVE IN KNOWING THAT WE WERE GOING TO NEED THAT SECOND FORCE MAJEURE NO MATTER WHAT, EVEN THOUGH TREASURY DOWN THE LINE DID EXTEND THAT. AGAIN, HERE WE ARE WITH OUR THIRD REQUEST. KRS HOUSING OURSELVES, WE WANT THIS DONE MORE THAN ANYONE. WE WOULDN'T WANT TO BE COMING HERE BEFORE YOU. WE'RE PUSHING OUR SUBCONTRACTORS. WE'VE DONE THINGS AS MUCH AS TRYING TO GET SUBCONTRACTORS FROM OUTSIDE OF THE PANHANDLE, OUT OF STATE, EVEN FROM WISCONSIN TO GET LICENSE IN TEXAS TO COME. WE'RE TRYING ALL DIFFERENT AVENUES. WE'VE BROUGHT IN TWO ELECTRICAL SUBCONTRACTORS. THANKFULLY, THE ONE THAT WAS SUPPOSED TO ORDER THE ORIGINAL SWITCH GEAR, THEY CLOSED UP THEIR DOORS IN MAY OF 2024 AND JUST SAID, WE'RE DONE, WE'RE CLOSING AND SORRY. THANKFULLY, WE HAD ANOTHER ELECTRICAL SUBCONTRACTOR COME ONBOARD TO HELP SPLIT THE BUILDING UP TO TRY TO MAKE UP TIME. AGAIN, WHEN THEY FOUND OUT THAT THE ORIGINAL SUBCONTRACTOR DIDN'T ORDER THE CORRECT SWITCH GEAR, THAT THEN PUSHED IT TO BE NOVEMBER 2024. ONCE YOU GET THE ELECTRICAL SWITCH GEAR, IT DOES TAKE TIME TO GET THAT INSTALLED AND THEN TO TEST ALL YOUR SYSTEMS PROPERLY TO MAKE SURE YOUR FIRE ALARM SYSTEM IS WORKING, YOUR HVAC EQUIPMENT IS WORKING, YOUR ELEVATOR EQUIPMENT IS WORKING. THAT DOES TAKE TIME, EVEN WHEN THE SWITCH GEAR DOES GET DELIVERED IN NOVEMBER 2024, TO MAKE SURE THAT EVERYTHING'S UP AND RUNNING AND RUNNING PROPERLY FOR THE RESIDENTS BEFORE THEY MOVE IN. >> YOU SAID MARCH OF '22, TWO-AND-A-HALF YEARS AGO, YOU GOT YOUR FINANCING ALL SEWED UP? >> IT WAS SEWED UP, BUT THEN WE DID NOT CLOSE UNTIL JULY OF 2022. >> TWO-AND-A-QUARTER YEARS AGO. WE'RE COMING TO US HERE AGAIN. I THINK WE TYPICALLY ALLOW OR FACTOR IN A 16-MONTH, 18-MONTH CONSTRUCTION PERIOD. I'M JUST HAVING TROUBLE UNDERSTANDING HOW YOU GUYS KEEP COMING TO US ASKING FOR EXTENSIONS. THAT'S ALMOST A RHETORICAL QUESTION BECAUSE IT IS WHAT IT IS AT THIS POINT. HOW DO WE KNOW THAT WE'RE NOT GOING TO SEE YOU GUYS AGAIN? YOU'RE SAYING A SIX-MONTH EXTENSION BASED ON THIS ELECTRICAL EQUIPMENT BEING DELIVERED IN NOVEMBER OF THIS YEAR? >> YES, SIR. >> IF IT DOESN'T GET DELIVERED IN NOVEMBER, WHAT HAPPENS? YOU GUYS ARE IN FRONT OF US AGAIN ASKING FOR ANOTHER EXTENSION? >> WE HAVE NOW AND WE ALWAYS HAD, WE'VE BEEN ON TOP OF THE NEW ELECTRICAL SUBCONTRACTOR, AND THEY ARE MORE WELL EQUIPPED, AND QUITE FRANKLY, THEY WERE BETTER THAN THE ORIGINAL SUBCONTRACTOR. BUT WHEN WE ORIGINALLY BID IT OUT TO THEM, THEY WERE NOT INTERESTED. AT THE POINT, THEY WERE JUST TOO BUSY. BUT TO ANSWER YOUR QUESTION, THEY GIVEN US ASSURANCES, AND WE HAVE SEEN THE DELIVERY SCHEDULE, AND THEY'VE BEEN IN CONTACT WITH THAT SWITCH GEAR TO MAKE SURE THAT IT IS GETTING DELIVERED NOVEMBER OF 2024. WE DO HAVE ASSURANCES THAT THAT SWITCH GEAR IS GOING TO SHOW UP. TO ANSWER YOUR QUESTION, AGAIN, WE'RE NOT SITTING BACK AND JUST RELYING ON THE CURRENT LABOR FORCE THAT WE HAVE. WE ARE LOOKING TO FIND WAYS TO SPEED UP AND TO ADD ADDITIONAL SUBCONTRACTORS, WHETHER IT'S TWO PLUMBING SUBCONTRACTORS, TWO ELECTRICAL SUBCONTRACTORS TO MAKE UP THAT TIME. I CAN ONLY RELY ON MY CONSTRUCTION TEAM ON WHAT THEY'VE TOLD ME. THEY SAID IF WE CAN GET THIS ADDITIONAL SIX MONTHS THAT THEY'RE CONFIDENT THAT THEY CAN GET IT DONE. BELIEVE ME, I DON'T WANT TO BE HERE BEFORE YOU. AGAIN, WE'RE OVER 70% COMPLETE. I DO THINK THAT DOES SHOW THIS PROJECT HAS BEEN MOVING. IT'S A LITTLE BIT SLOWER AND JUST ASKING FOR A LITTLE BIT MORE TIME FROM YOU. >> MR. CHAIRMAN. >> YES, MR. MARCHANT, PLEASE. >> WHAT IS THE PRIMARY TARGET? WHO'S GOING TO LIVE IN THIS? IS IT SENIOR? WHAT IS THE POPULATION? >> YES, VICE CHAIR. IT'S 124 SENIOR AFFORDABLE HOUSING UNITS. IT'S FOR SENIORS. >> THANK YOU. [00:30:02] >> I CAN TELL YOU THERE'S ALREADY GREAT INTEREST. WE'VE HEARD NOTHING FROM THE COUNTY AND FROM THE CITY THAT RESIDENTS OF AMARILLO THAT ARE SENIORS, THEY TALK ABOUT THE STORIES OF THEM BEING IN THAT HOSPITAL. >> THE ANSWER IS SENIORS? >> SENIORS. YES, SIR. >> THANK YOU. >> HOW MANY 30% UNITS DO YOU HAVE, SQUARE PER UNIT? >> WE HAVE 13, I BELIEVE. >> MR. CHAIRMAN. >> MS. FARIAS. >> THE MINUTE YOU SAY SENIORS, OF COURSE. MY MOM PASSED AWAY AT THE AGE OF 93 AND WE GREW UP IN THE HOUSING PROJECTS. I KNOW ALL ABOUT AFFORDABLE HOUSING. I ALSO RAN AND LIVED IN THE HOUSING PROJECTS IN BETWEEN PRECEDENTS. I CAN ALREADY TELL YOU THAT IF HOUSING IS ALREADY 40 OR 50-YEARS-OLD, YOU'RE GOING TO HAVE ALL KINDS OF PROBLEMS TO THE POINT THAT YOU ALMOST HAVE TO DEMOLISH EVERYTHING AND START AGAIN. MY QUESTION TO YOU, SIR, IS, WHAT YOU DO HAVE GOING FOR YOU, THIS IS GOING FOR SENIORS. THIS BUILDING IS 122-YEARS-OLD. >> YES. >> SURELY SOMEONE HAD TO HAVE ANTICIPATED THAT YOU WERE GOING TO HAVE ASTRONOMICAL NUMBERS AND CONCERNS AND PROBLEMS. BUT IT DOESN'T APPEAR THAT THAT WAS TAKEN INTO ACCOUNT. I DO REMEMBER WHEN NOT JUST THIS GROUP, BUT OTHER GROUPS HAVE COME IN AND SAYS, I DON'T HAVE A WORKFORCE. MY INITIAL ANSWER IS, WELL, WHY ARE YOU BUILDING IF YOU CAN'T FIND A WORKFORCE? THE LAST ONE WAS, WE LOST THE ELECTRICIANS AND WE'RE LOOKING FOR. WHEN YOU TALK ABOUT AFFORDABLE HOUSING MY CONCERN HAVING BEEN RAISED IN PUBLIC HOUSE AND ONE PUBLIC HOUSE IS ALWAYS SOMETIMES PEOPLE ARE CONTENT WITH FINDING ANYONE THAT CAN TIE TWO WIRES TOGETHER BECAUSE IT'S AFFORDABLE HOUSING. SIR, YOU'RE PROBABLY GOING TO GET MY VOTE BECAUSE IT'S FOR SENIORS. OTHER THAN THAT, I DON'T THINK I WOULD. WITH ALL DUE RESPECT TO YOUR REPRESENTATIVES, I PROBABLY WOULDN'T VOTE OTHER THAN BECAUSE IT'S FOR SENIORS. BUT SOMEONE SHOULD HAVE TAKEN INTO ACCOUNT THAT IF IT'S 122-YEARS-OLD, IT'S ALSO HISTORICAL, AND YOU SHOULD HAVE ANTICIPATED BECAUSE YOU GUYS GET PAID GOOD MONEY. THAT'S MY $0.02 WORTH. BUT THREE TIMES IS THREE TIMES. YOU DON'T KNOW IT. ONCE IS NO. SECOND TIME IS NO. BUT A THIRD TIME, COME ON. DO YOU REALLY MEAN THAT? CAN I COME BACK AGAIN? COME ON. THAT'S MY TWO CENTS WORTH. >> THANK YOU, MR. JONES. >> HOW REALISTIC DO YOU FEEL THE APRIL 2025 IN SERVICE DATE IS? I KNOW YOU'VE HAD TO ALTER IT A COUPLE OF TIMES, OBVIOUSLY, UNFORESEEN EVENTS, AND WE'VE HEARD ABOUT THAT TODAY. BUT HAVE YOU STRESS TESTED THAT APRIL '25 THERE'S ENOUGH BUFFER IN THE SCHEDULE THAT EVEN IF LET'S SAY TO THE CHAIRMAN'S POINT, THERE'S A DELAY IN THE ELECTRICAL DELIVERY. IS THAT TAKEN INTO ACCOUNT AND NO MATTER WHAT, HEY, WE'RE GOOD FOR APRIL? >> YES, I CAN TELL YOU THAT THEY HAVE BEEN DOING STRESS TESTING ON THAT. AGAIN, I'M REALLY PUSHING IT ON CONSTRUCTION TO SAY, YOU GUYS NEED TO FIGURE THIS OUT. I'M SAYING I'M GOING TO THE BOARD FOR THIS THIRD FORCE MAJORITY REQUEST THAT WE KNOW HAS NEVER HAPPENED. I'M ALMOST PUTTING MY HANDS UP AND SAYING, THIS IS YOUR PROBLEM, YOU NEED TO FIGURE THIS OUT, AND WE'VE HAD THOSE TOUGH CONVERSATIONS WITH THEM, AND THEY'RE TELLING US APRIL 2025 IS WHEN THEY CAN DELIVER. I KNOW THE REQUEST IS FOR JUNE FOR THAT ADDITIONAL TWO MONTHS BUT AGAIN, I HAD HEARD AND THEY HAVE CONFIRMED THAT APRIL IS THEIR CURRENT DATE. I WANT TO SAY THERE WAS SOME BUFFER IN THERE, BUT APRIL IS THE DATE THAT THEY HAVE STRESSED TO US. >> I'D LIKE TO MAKE A SUGGESTION, GIVING YOU THE DEVELOPMENT TEAM AN OPTION HERE. WITH THE WARNING THAT WE DON'T WANT TO HAVE TO ADDRESS THIS AGAIN AS A BOARD. WOULD IT MAKE MORE SENSE FOR YOU TO COME BACK TO THE BOARD IN DECEMBER OF THIS YEAR WITH A CONFIDENCE LEVEL OF COMPLETION TARGET DATE, [00:35:09] MUCH HIGHER THAN IT IS NOW AND THEN WE CAN DECIDE IF IT'S SIX MONTHS IS ENOUGH? IT COULD VERY WELL BE, YOU GUYS BY THAT TIME, HEY, THE ELECTRICAL EQUIPMENT CAME IN EARLY. WE'VE GOT TWO TEAMS ON DOING IT AND APRIL 30TH OR WHATEVER IS A REALLY SOLID DATE. YOU COULD ALSO COME BACK AND SAY, HEY, LOOK, WE'RE ACCOUNTING MORE DELAYS, IT'S RAINING, WHATEVER. IT HAD SNOWSTORM AND IT'S GOING TO BE JUNE 30TH OR SOMETHING OR JULY 15TH OR SOMETHING LIKE THAT. I DON'T WANT YOU GUYS TO COME BACK IN FRONT OF US AGAIN TRYING TO SAY [OVERLAPPING] >> BELIEVE ME, I DON'T WANT TO BE HERE TODAY TO REQUEST THIS. WE FULLY UNDERSTAND THAT. I WOULD SAY THE REQUEST IS FOR JUNE OF THIS YEAR IN THE REQUEST. AGAIN, WE'RE SHOWING APRIL, WE'RE REQUESTING JUNE. I THINK ANOTHER THING THAT WE COULD DO IF TDHCA WANTS, WE CAN PROVIDE UPDATED MONTHLY REPORTS TO TDHCA AND TO THE BOARD, IF YOU'RE SO INCLINED TO RECEIVE THOSE TO LET YOU KNOW WHERE PROGRESS IS. >> IT'S MORE FOR YOUR BENEFIT BECAUSE IF WE VOTE TODAY IT'S GOING TO BE SUCH A MOVING OF MOUNTAINS TO HAVE US VOTE YET AGAIN FOR ANOTHER EXTENSION. >> YEAH. THE REASON WE'RE DOING IT NOW IS WE DIDN'T WANT TO BE COMING HERE TO YOU LAST MINUTE IN DECEMBER AND YOU'RE GOING TO AND WE DIDN'T WANT TO HEAR, WELL, WHY DID YOU NOT TELL US THIS EARLIER SO THAT'S WHY WE WANTED TO BE PROACTIVE AND GET AHEAD OF THIS TO LET YOU KNOW NOW. I'M RELYING ON CONSTRUCTION THAT THEY'RE TELLING ME APRIL WITH SOME BUFFER IN THERE. AGAIN, WE'RE REQUESTING JUNE. I GUESS WE'D PROBABLY HAVE TO DISCUSS THAT. >> WE CAN GIVE YOU JUNE HERE, BUT THEN THE NEXT TIME WE'LL HEAR FROM YOU BETTER BE THE GRAND OPENING. >> I'M LOOKING FORWARD TO THE GRAND OPENING AND HOPEFULLY YOU CAN ATTEND BECAUSE THAT WILL BE A CELEBRATION, FINALLY. [LAUGHTER] >> CERTAINLY WILL. SORRY, BUT WHAT WILL BE USEFUL? >> KENNY WITH A QUESTION. >> YES, [INAUDIBLE]. >> IS THE SIX MONTHS A MAGIC NUMBER THAT STAFF HAS RECOMMENDED OR WHAT DISCRETION DOES THIS BOARD HAVE AS FAR AS TIME? >> NO, WE HAVE ANY DISCRETION. WE'VE BEEN STARTING TO MAKE IT A SIX-MONTH EXTENSION BECAUSE THESE FORCE MEASURES ARE GETTING OLD. NOT JUST YOU GUYS, BUT ACROSS THE BOARD. >> WE CAN MAKE IT EIGHT OR NINE. THERE'S NOTHING MAGICAL ABOUT SIX EXCEPT WE HAVE ALWAYS DONE SIX? >> CORRECT. WE DO EIGHT OR NINE? >> YEAH. THIS IS LIKE 48, 36, 42. DOES ANYONE ELSE WANT TO MAKE A COMMENT ON THIS? >> I'M KEN HANS FOR KRS PARTNERS WITH COMMONWEALTH. I WANT TO ADDRESS A COUPLE OF THINGS FIRST. WE HIRED COMPANIES TO GO IN AND GIVE US AN ESTIMATE BEFORE WE FILED AN APPLICATION, AND THEY MISSED SOME OF THE THINGS ON THE MOLD. YOU TAKE A BUILDING THAT OLD. IT'S TOUGH, BUT WE FILED ALSO FOR HISTORICAL TAX CREDITS. WE HAD WINDOWS MADE, AND THEY LOOKED LIKE THE WINDOWS, BUT THEY DIDN'T HAVE THE RATINGS OF TODAY'S WINDOWS. THAT WAS JUST ONE INCIDENT. WE HAD NO IDEA THAT AMAZON WAS GOING TO COME IN AND BUILD A MILLION SQUARE FOOT BUILDING AND THAT BUCKEYES WAS GOING TO BUILD THE LARGEST SERVICE STATION THAT THEY HAD IN THE NATION. WE GOT BEHIND. THE FIRST WAIVER AND EXTENSION WAS PRIMARILY FOR EVERYONE THAT WAS DOING ANY BUSINESS IN THE STATE BECAUSE OF THE PANDEMIC. THE SECOND ONE WE FILED TO GET IT, BUT WE COULD HAVE NOT FILED AND THE IRS RULED TO GIVE US ADDITIONAL TIME. THIS ONE HAS REALLY BEEN TOUGH. I'VE BEEN DOING THESE SINCE '96. I'VE NEVER HAD ONE THAT WAS THIS DIFFICULT. I KNOW YOUR COMMITMENT. I APPRECIATE THE SERVICE. I'M ON A NOTE FOR $26 MILLION PERSONALLY. THIS IS A BIG ISSUE IN AMARILLO BECAUSE THERE'S BEEN NOTHING BUILT IN THAT AREA FOR OVER 50 YEARS. WE'RE TAKING SOMETHING THAT'S AN EYESORE AND MAKING SOMETHING THAT'S GOING TO BE REAL POSITIVE. [00:40:01] THERE IS A DEMAND FOR SENIOR HOUSING. WE'VE WORKED WITH THE ELECTRICAL PEOPLE, WALKED OFF AND WE FOUND SOME PEOPLE, BUT IT WASN'T LIKE THEY COULD START THE NEXT DAY OR EVEN THE NEXT MONTH. WE DO HAVE A LOT OF PROBLEMS, A LOT OF ISSUES. I'VE BEEN GOING UP THERE ONCE A WEEK OR ONCE EVERY TWO WEEKS. WE'RE STAYING ON TOP OF IT, BUT WE HAVE HAD PROBLEMS WITH THE CONSTRUCTION PEOPLE, AND WE'VE BEEN AFTER THEM AND WE'VE STAYED AFTER THEM. I TOOK MY GRANDCHILDREN UP AND THEY WERE LOOKING AT IT, AND I SAID, SOMEDAY, YOU'RE GOING TO BRING YOUR GRANDCHILDREN UP HERE, YOU'RE GOING TO SAY, WE THINK NEXT MONTH, IT'LL MAKE ITS FIRST PROFIT. THEY ALL LOOKED AT ME LIKE, THANKS, GRANDDAD. BUT I KNOW YOU'RE UPSET ABOUT IT. I DON'T BLAME YOU. I UNDERSTAND YOUR QUESTIONS. IF I DON'T WANT TO COME BACK SOME OTHER TIME, IF YOU GIVE US SIX MONTHS, SAY, WELL, WE JUST NEED TWO MORE MONTHS AND WE COULD LIVE WITH THAT, MR. CHAIRMAN, IF NEED BE. BUT THIS HAS BEEN DIFFICULT ON OUR WHOLE TEAM, AND WE APOLOGIZE. BUT WE'VE HAD THINGS HAPPEN THAT JUST HAD NEVER HAPPENED ON ANY PROJECTS I'VE BEEN INVOLVED BEFORE. I APOLOGIZE. I RESPECTFULLY REQUEST WE GET THIS SIX MONTHS. BUT IF THE COMMISSION DECIDES THAT IT WANTS FOR US TO COME BACK IN DECEMBER, I JUST WANT YOU TO AT LEAST HAVE AN OPEN MIND BECAUSE I'M GOING TO BE SIGNING MORE NOTES AS WE GO FURTHER ALONG. REALLY, WE NEED TO GET THIS THING FINISHED, NOT ONLY FOR THE COMMISSION, BUT FOR US. WE'VE GOT A LOT OF MONEY TIED UP IN IT. ANY QUESTIONS? >> MR. HANS, DID YOUR GENERAL CONTRACTOR HAVE HISTORICAL INNOVATION EXPERIENCE? >> YES, THEY HAVE. THEY HAVE DONE QUITE A FEW. AGAIN, THIS, I THINK IS A BEAST THAT THEY HAVE NOT ENCOUNTERED BEFORE BEING OVER 250,000 SQUARE FEET ALONG WITH, WE WILL SAY THEY DID NOT KNOW THE SUBCONTRACTOR BASE. >> THEY WEREN'T LOCAL? >> NO. >> BECAUSE IT APPEARS IN YOUR SCHEDULE AND APPEARS IN YOUR PROCESS THAT THE HISTORICAL HAS BEEN SHOWING YOU ALIVE. THEN OBVIOUSLY, THE QUALITY OF HIS TALENT IN HIS STAFF, AND YOUR ELECTRICIAN, WALKING OFF THE JOB IS A REFLECTION OF WHO HE'S BROUGHT TO THE TEAM. BUT YOUR GC DID HAVE HISTORICAL AND HAS DONE HISTORICAL WORK ALSO. >> NOT TEXAS HISTORICAL, BUT HISTORICAL. >> THAT'S THE WINDOW PROBLEM. THANK YOU. >> ANYONE HAVE MORE QUESTIONS FOR MR. HANS? >> THANK YOU. >> THANK YOU, SIR. CODY. >> YES, SIR. >> STAFF RECOMMENDS A SIX-MONTH EXTENSION. >> YES, SIR. >> DO THE BOARD MEMBERS HAVE ANY QUESTIONS AND ENTERTAIN A MOTION ON GRANTING A SIX-MONTH EXTENSION TO THIS PROJECT. >> MR. CHAIRMAN, RELUCTANTLY I MOVE THE BOARD GRANT, I'M NOT HAPPY ABOUT IT BUT I MOVE THE BOARD GRANT THE REQUESTED TREATMENT UNDER AN APPLICATION OF THE FORCE MATERIAL RULE TO COMMENTS AT ST. ANTHONY'S WITH A PLACED IN SERVICE DEADLINE OF JUNE 30TH, 2026, ALL IS DESCRIBED, CONDITIONED AND AUTHORIZED IN THE BOARD ACTION REQUEST, RESOLUTION AND ASSOCIATED DOCUMENTS ON THIS ITEM. >> MOTION MADE BY MS. FARIAS. IS THERE A SECOND? >> SECOND. >> SECONDED BY MR. HARPER. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> AYE. >> AYE. >> LET THE RECORD REFLECT THAT THE CHAIRMAN SAID, NO. THE MOTION PASSES, 5-1. >> THANK YOU. YOU NEED TO CHECK YOUR ELEVATOR [INAUDIBLE]. THANK YOU. [00:45:05] >> ANY BETS ON WHETHER WE'RE GOING TO HEAR ABOUT WANTING ANOTHER EXTENSION ON THAT? AGAIN, A RHETORICAL QUESTION. MOVING RIGHT ALONG TO ITEM 18 ON THE AGENDA. PRESENTATION, DISCUSSION, AND POSSIBLE APPROVAL TO HEDGE INTEREST RATE RISK ASSOCIATED WITH MORTGAGE LOANS TO BE ACQUIRED WITH THE PROCEEDS OF RESIDENTIAL MORTGAGE REVENUE BONDS, SERIES 2024A AND 2024B, AND RESIDENTIAL MORTGAGE REVENUE BONDS SERIES 2024C AND 2024D. WHY DID WE BREAK THAT UP AND JUST SAY A3D? [LAUGHTER] MR. FLETCHER. >> GOOD MORNING, CHAIRMAN VASQUEZ, BOARD. MY NAME IS SCOTT FLETCHER. I'M THE DIRECTOR OF BOND FINANCE FOR TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS. WITH THIS ITEM, BOARD IS SEEKING THE DEPARTMENT IS SEEKING BOARD APPROVAL TO IMPLEMENT A ONE TIME HEDGE ON INTEREST RATE RISK ASSOCIATED WITH MORTGAGE LOANS TO BE ACQUIRED WITH PROCEEDS FROM RMRB 24AB AND CD. WELL, THERE'S A REASONABLE CASE TO BE MADE THAT THE PROPOSED HEDGE IS AUTHORIZED WITHIN THE LANGUAGE OF THE DEPARTMENT'S CURRENT SWAP POLICY, MOST RECENTLY UPDATED AND APPROVED BY THE BOARD AT THE APRIL 2024 MEETING. WE PRESENT THIS ITEM FOR SPECIFIC BOARD APPROVAL ON GUIDANCE FROM COUNSEL. AS THE SWAP POLICY WAS DRAFTED SPECIFICALLY FOR AND HISTORICALLY HAS BEEN UTILIZED TO HEDGE VARIABLE RATE RISK ON BOND DEALS. THIS HEDGE IS DIFFERENT. WE'RE LOOKING TO HEDGE THE MORTGAGE LOANS THAT WE'RE GOING TO ORIGINATE WITH PROCEEDS FROM THOSE BOND DEALS. >> AS OUTLINED IN THE BAR, THE DEPARTMENT HAS ISSUED AROUND 500 MILLION ACROSS TWO DEALS OVER THE PAST SIX MONTHS AS OUTLINED. SINCE JULY, MORTGAGE RATES HAVE FALLEN ABOUT 50 BASIS POINTS. NOT ONLY HAS THIS SLOWED THE PACE OF LOAN RESERVATIONS, BUT IT'S ALSO RESULTED IN AN UNUSUALLY HIGH LEVEL OF LOAN CANCELLATIONS. AS A RESULT, THE DEPARTMENT CURRENTLY WE'VE GOT RESERVATIONS, BUT WE CURRENTLY HAVE AROUND 130 MILLION IN FUNDS STILL AVAILABLE TO LEND. AS RATES FALL, WE EXPECT SOME OF THOSE RESERVATIONS WILL DROP OUT. IT'S JUST AS PEOPLE WANT TO TAKE ADVANTAGE OF A LOWER INTEREST RATE MARKET. OUR CURRENT LOAN RESERVATION PACE IS AROUND 2-3 MILLION PER DAY. AS SUCH, DEPARTMENT PROJECTS WILL HAVE FUNDS AVAILABLE THROUGH MID NOVEMBER, POSSIBLY EARLY DECEMBER. OBVIOUSLY, FEDERAL OPEN MARKET COMMITTEE IS SCHEDULED TO DO THREE MORE MEETINGS IN 2024, SEPTEMBER 28TH, NOVEMBER 7TH, AND DECEMBER 18TH. MARKET EXPECTATIONS ARE FOR A FED RATE CUT ON SEPTEMBER 18TH OF AT LEAST 25 BASIS POINTS. MARKET PROJECTION FOR YEAR END, I THINK AGGRESSIVELY ARE 425-450. I THINK THEY WON'T GO THAT LOW. HOWEVER, AS AS RATES MOVE LOWER, THE DEPARTMENT WOULD NEED TO ADJUST THE MORTGAGE LOAN RATES DOWNWARD IN ORDER TO PLACE THE LOANS IN THE MARKET. THIS WOULD REDUCE THE MARGIN ON OUR DEALS AND IN SOME SCENARIOS LEAD TO CASH FLOW DEFICITS IN CERTAIN MATURITIES. TO BE VERY CLEAR, IT IS POTENTIAL FUTURE CASH FLOW DEFICITS THAT WE'RE LOOKING TO HEDGE. STATE HFAS HAVE SEVERAL TOOLS AVAILABLE IN THEIR TOOLBOX TO MANAGE PIPELINE RISK, INCLUDING THE ISSUANCE OF 0% LOANS TO BLEND DOWN THE OVERALL LOAN YIELD AND THE ABILITY TO ALLOCATE LOANS ACROSS MULTIPLE OPEN DEALS. CONTINUOUS ACTIVE INTEREST RATE RISK MANAGEMENT IS AN INHERENT PART OF CONTINUOUS PROGRAM. THE DEPARTMENT IS CURRENTLY WORKING WITH BOTH TAX COUNSEL AND OUR FA OR FINANCIAL ADVISOR IN ORDER TO IMPLEMENT BROADER ONGOING RISK MANAGEMENT STRATEGIES ON THIS AND FUTURE TRANSACTIONS. REALLY, THAT IS A LONG WAY OF SAYING, AS WE LOOK TO MOVE TO A CONTINUOUS PROGRAM, INTEREST RATE RISK MANAGEMENT HEDGING IS PART OF THE ACTIVITY. IT'S PART OF THE OPERATION. IT'S PART OF DOING THE JOB. BUT MORE IMMEDIATELY, THE DEPARTMENT NOW SEEKS TO PARTIALLY HEDGE THIS RISK BY BUYING CURRENT COUPON GINNIE MAE TO TBA MORTGAGES IN THE OPEN MARKET FOR DELIVERY 30-60 DAYS FORWARD. IF MORTGAGE RATES FALL, THE VALUE OF THE TBA MORTGAGE HEDGES WILL INCREASE. IF RATES RISE, THE VALUE OF THOSE MORTGAGES WILL FALL. PRIOR TO DELIVERY DATE OF THOSE MORTGAGES, THE DEPARTMENT WILL SELL THOSE SAME TBA MORTGAGES BACK IN THE OPEN MARKET, WHICH WILL RESULT IN A CASH SETTLEMENT. ANY PROFIT OR LOSS ON THE HEDGE SETTLEMENT WOULD BE RECOGNIZED IN THE RMRB EXCESS RESERVES ACCOUNT. THESE DOLLARS ARE DESIGNATED TO OFFSET FUTURE POTENTIAL CASH FLOW DEFICITS IN EACH BOND TRANSACTION. THIS STRATEGY ALIGNS WITH THE POTENTIAL EXPOSURE AS ANY CASH FLOW DEFICITS IN THE FUTURE WOULD NEED TO BE FUNDED FROM EXCESS RESERVES ANYWAY WITHIN THE INDENTURE. [00:50:04] TO DETERMINE THE APPROPRIATE HEDGING STRATEGY, THE DEPARTMENT WITH THE ASSISTANCE OF OUR FINANCIAL ADVISOR HAS MODELED MULTIPLE INTEREST RATE SCENARIOS IN PREPAYMENT SPEED SCENARIOS. THE ATTACHMENT PROVIDED IN THE BOARD PACKET, ENTITLED PIPELINE HEDGE CASH IMPACT SHOWS THE CASH FLOW IMPACTS OF AN IMMEDIATE 50 AND 100 BASIS POINT MOVE IN EITHER DIRECTION. IN PROJECTED MORTGAGE LOAN RATES AND IN VARIOUS PREPAYMENT SPEED SCENARIOS, AS WELL AS THE PROJECTED PRICE MOVEMENTS IN A 6% GINNIE MAE TBA, GIVEN THE SAME 50 AND 100 BASIS POINT MOVE. AS YOU CAN SEE, THIS IS A PARTIAL HEDGE, WE'RE TALKING ABOUT HEDGING ABOUT 50% OF THE POTENTIAL EXPOSURE. THIS ANALYSIS DEMONSTRATES THE EFFECTIVENESS OF THE HEDGE. I HAVE A LOT I CAN GO THROUGH, BUT I THINK IT'S PROBABLY A GOOD TIME TO STOP AND ANSWER ANY QUESTIONS THAT ANYONE MAY HAVE. >> GOOD. THANK YOU, SCOTT. BOARD MEMBERS HAVE QUESTIONS? >> MR. CHAIRMAN, JUST ONE QUESTION AND THEN A COMMENT, JUST FOR CLARITY. I THINK SOMETHING YOU SAID IN YOUR PRESENTATION IS IMPORTANT. WE ARE PROJECTING CASH FLOW DEFICITS BASED ON RATES FALLING. >> CORRECT. >> YOU'RE HOPING THAT THE HEDGE THAT YOU IMPLEMENT HERE AS PART OF THE STRATEGY WILL OFFSET THOSE CASH FLOW DEFICITS. THEY IN ESSENCE, ARE FENCED IN WITHIN THE EXCESS RESERVES ACCOUNT, CORRECT? >> CORRECT. >> SECONDLY, ON EXECUTION OF A POTENTIAL HEDGE. YOU MENTIONED UP TO 50% ON THE HEDGE? ARE YOU LEAVING IT FOR SOME PERIOD OF TIME, OR DO YOU HAVE THE FLEXIBILITY IF THE FED COMES IN AND DOES SOMETHING ON EMERGENCY NATURE? COULD YOU THEN JUMP IN AND EXECUTE A DIFFERENT STRATEGY FOR THE HEDGE LOWER OR HIGHER AS YOU NEED IT? >> GREAT QUESTIONS. THE ANSWER IS YES. BASICALLY, WHAT WE'RE LOOKING AT HERE IS WE'RE SAYING, WE'VE GOT A LOT OF MOVING PARTS, AND WE'RE ALSO LOOKING NOT AT SAYING, WHERE OUR RATES ARE RIGHT NOW, AND IF RATES STAY THE SAME, WE'VE GOT X MARGINS IN OUR INDENTURES AND EVERYTHING LOOKS GOOD. IF RATES CHANGE AND WE HAVE TO LEND AT LOWER RATES, WE'LL HAVE POTENTIAL CASH FLOW DEFICITS IN THE YEARS 3-7 ROUGHLY. THERE ARE PROBABLY SOME LONGER TERM CASH FLOWS, BUT THERE'S A LOT OF THINGS THAT HAPPEN IN 30 YEARS AND YOU DON'T HEDGE 30 YEAR RISK. WE'RE REALLY LOOKING AT HEDGING THE SHORT TERM RISK. AGAIN, WHAT WE'VE LAID OUT IS BUYING TBAS, WHICH IS ESSENTIALLY BUYING MORTGAGES IN THE CURRENT MARKET ENVIRONMENT WITH THE INTENTION OF SELLING THEM AS WE GET ACTUAL LOANS ON THE BOOKS. AND THAT COULD CHANGE. THERE ARE A LOT OF THINGS THAT COULD CHANGE. WE'RE COMING INTO AN ELECTION. WE'VE GOT A PARTIAL HEDGE HERE. WHAT WE'VE LAID OUT IS USING 30-60 DAY FORWARDS, BECAUSE THAT'S WHERE THE MARKET'S MOST EFFICIENT. WHAT WE'VE LAID OUT HERE IS UP TO 120 DAYS THAT WE WOULD DO THIS. THAT WOULD TAKE US THROUGH THE FIRST OF THE YEAR, WHICH TAKES US PAST WHERE WE ENVISION, STILL HAVING FUNDS TO LEND. WHAT WE'VE LAID OUT IS A HEDGE NOT TO EXCEED 40 MILLION IN EXPOSURE AT ANY ONE TIME. THAT'S THE NUMBER WE'RE ASKING FOR. WE'RE LOOKING AT DOING THIS WITH 20 MILLION. BUT IF WE SEE AN AGGRESSIVE RATE MOVE, IF WE SEE SOMETHING CHANGE, WE HAVE THE FLEXIBILITY TO SAY, WE'RE GOING TO HEDGE MORE HERE, OR IF WE SEE SOMETHING GO AGAINST US, OR IF WE SEE VOLATILITY, THERE ARE THINGS THAT WE CAN DO TO SAY, LET'S WIND THIS BACK. IT'S ABOUT PRUDENT RISK MANAGEMENT POLICY. WE'RE NOT DOING ANYTHING WHERE WE'RE LOCKING IN AND HOPING. IT'S GOING TO BE AN ACTIVE POLICY THAT WE MANAGE ON A GO FORWARD BASIS. > IN ESSENCE, WE'RE BOIL IT DOWN FOR EVERYBODY. IT'S EFFICIENCY AND CASH FLOW MANAGEMENT, AND YOU'RE TRYING TO DO A BETTER ASSET LIABILITY MATCH STRATEGY, RIGHT? >> EXACTLY. >> GREAT. THANK YOU. >> MISS MORTON. >> IF A PERSON MAKES A RESERVATION AND THEN THEY PULL OUT, WHAT PENALTY [INAUDIBLE]. >> THE ONLY PENALTY THAT THEY HAVE IN THAT SCENARIO IS THAT THEY CAN'T COME BACK INTO OUR PROGRAM FOR 60 DAYS. I DON'T KNOW IF THE ANSWER IS RELATED TO THAT. [LAUGHTER] BUT THERE'S NO PENALTY. WE HAVE LOOKED AT POTENTIALLY HAVING LENDERS PAY FOR RESERVATIONS. IF YOU WANT TO RESERVE FUNDS, YOU'VE GOT TO PUT MONEY DOWN AND THAT MONEY WOULD BE LOST. BUT WE ARE IN A STATE THAT HAS A COMPETING ENTITY, AND WE WANT TO BE CAREFUL ABOUT MAKING SURE THAT WE ARE THE LENDER OF CHOICE IN WHAT WE DO. [00:55:05] >> GREAT POINT, IT'S VERY IMPORTANT. WE HAVE COMPETITION. >> THE OTHER QUESTION IS, WHY DOES THE BOARD HAVE TO APPROVE THIS? >> I APPRECIATE THAT. WE HAD THAT CONVERSATION WITH COUNCIL. THE EXISTING IT'S CALLED A SWAP POLICY, AND IT WAS CALLED A SWAP POLICY, I THINK, VERY INTENTIONALLY WHEN IT WAS DRAFTED AND ORIGINALLY APPROVED BY THE BOARD ON SEPTEMBER 9TH, 2004. IT HAS BEEN REVISED OVER THE YEARS TO REFLECT CHANGES IN STATE STATUTE. AS WE LOOK AT THE POLICY AND THE WAY THE POLICY IS DRAFTED, MY READING IS THAT IT'S VERY CLEAR THAT WE HAVE THE ABILITY TO MANAGE THIS INTEREST RATE RISK WITHOUT BOARD APPROVAL WITHOUT SPECIFIC BOARD APPROVAL. WE'RE PRESENTING THIS REALLY IN TERMS OF SAYING, IN A HISTORICAL CONTEXT, THAT POLICY WAS WRITTEN TO HEDGE VARIABLE RATE RISK. IF YOU ISSUED VARIABLE RATE DEBT, YOU DO A SWAP WHERE YOU PAY FIXED AND RECEIVE FLOAT, AND THAT HEDGES YOUR VARIABLE RATE RISK. HOWEVER, THE POLICY IS WRITTEN WHERE IT SAYS ASSETS AND LIABILITIES. IT SAYS BOND ISSUANCE AND INCIDENTAL RISKS ASSOCIATED WITH THAT BOND ISSUANCE. MY READING IS THAT WE WOULD HAVE THE AUTHORITY TO DO THIS, AND IT WOULD BE WITHIN OUR PURVIEW OF DOING MY WORK AND OUR WORK PRUDENTLY. BUT AGAIN, IN THE HISTORICAL CONTEXT OF WHY THAT POLICY WAS WRITTEN, IT'S NEVER BEEN PRESENTED TO THE BOARD AT ANY POINT, I THINK, TO OUR KNOWLEDGE, WHERE WE WOULD LOOK TO HEDGE SOMETHING OTHER THAN THE UNDERLYING LIABILITY. AGAIN, THE POLICY SAYS ASSETS AND LIABILITIES. IT SAYS BONDS AND INCIDENTAL RISKS ASSOCIATED. I PRESENT THIS. WE WILL BE REDRAFTING THE SWAP POLICY, THE REVISED VERSION. WILL REALLY BE AN UPDATE. BUT IT WILL BE VERY SPECIFIC, CHANGING THE NAME FROM SWAP POLICY TO INTEREST RATE RISK MANAGEMENT POLICY, WHICH WILL INCLUDE SWAPS AND OTHER INTEREST RATE RISK MANAGEMENT TOOLS THAT WE SHOULD BE IMPLEMENTING AS PRUDENT MANAGERS OF OUR INDENTURES. >> WE DON'T MAKE THE TIME OUT MORE THAN 60 DAYS BECAUSE WE REALLY NEED THAT [INAUDIBLE] BACK IN THE BUILDING PROCESS. [INAUDIBLE]. >> WE DON'T WANT TO BE PICKED OFF, AS RATES FALL. IF SOMEONE RESERVES AT SAY A 6% LOAN, AND THEN OUR RATES DROP AND THEY CAN NOW DO A FIVE AND A HALF, WE DON'T WANT THEM TO BASICALLY PICK US OFF AND TAKE THE 50 BECAUSE WE'VE ALREADY BORROWED THE MONEY. BUT BY THE SAME TOKEN, WE DON'T WANT TO MAKE IT ONEROUS FOR PEOPLE. WE'RE NOT TRYING TO HURT ANYBODY WITH WHAT WE DO. WE WANT TO GIVE THEM THE FLEXIBILITY. IF THEY DON'T WANT TO USE OUR LOAN, WE'RE NOT GOING TO FORCE THEM INTO DOING IT. WE LOOK AT THE LOAN STAGE, WHETHER IT IS IN THE RESERVATION, WHETHER IT'S BEEN UNDERWRITER CERTIFIED, WHETHER IT GOES THROUGH THE PROCESS. IT'S TYPICALLY A 60 DAY PROCESS FROM RESERVATION TO COMPLETION. OCCASIONALLY, IT'S A LITTLE BIT LONGER. WE DO CHARGE EXTENSION FEES WHEN IT EXTENDS. I DON'T EVEN KNOW WHERE I WAS GOING WITH THAT. SO SORRY. [LAUGHTER] >> I WILL BE IN FAVOR OF THE REDRAFT IN POLICY WORK. THE BOARD DOES NOT HAVE TO APPROVE THIS TYPE OF THE MOTION [INAUDIBLE]. >> VERY MUCH APPRECIATE THAT. >> CERTAINLY, TODAY, HE'S ASKING FOR THIS ONE HEDGE AND WE'RE GOING TO UPDATE THE POLICY [INAUDIBLE] >> MR. CHAIRMAN JUST ONE QUESTION AND THIS IS RELATED, BUT NOT SPECIFIC TO THIS PARTICULAR POLICY. I WOULD BE CURIOUS. ARE YOU TRACKING HOW MANY LOAN APPLICANTS ARE DROPPING OUT AS RATES FALL AND WHAT THAT LOSS TO THE AGENCY IS? >> WE DO. IT'S PART OF PIPELINE MANAGEMENT, AND THAT DOES REMIND ME TO ANSWER YOUR QUESTION. HISTORICALLY, WE END UP WITH ABOUT A 20% FALLOUT RATE. THAT'S PRETTY INDUSTRY STANDARD WHEN WE LOOK NATIONWIDE. BUT THAT'S OVERALL. WE'RE NOW IN AN ENVIRONMENT RATES ARE GOING DOWN WHERE PEOPLE ARE GOING, WELL, I'VE LOCKED THAT LOAN, BUT THE MARKET'S GOING IN MY FAVOR HERE. I DON'T HAVE TO DO THIS RIGHT NOW. WE'RE SEEING A HIGHER FALLOUT RATE. WE'VE ACTUALLY APPLIED A 25% FALLOUT RATE FOR LOANS THAT ARE IN RESERVATION STAGE OR UNDERWRITER CERT, ONCE THEY GET FARTHER ALONG THE LINES, AND IT LOOKS LIKE THEY'RE ACTUALLY GOING TO EXECUTE. WE'VE SEEN AN EXTRAORDINARILY HIGH FALLOUT RATE ON OUR RESERVATIONS, AND WE'VE ADJUSTED THAT. IN TERMS OF COST, I THINK THAT IS A GREAT QUESTION IN TERMS OF HOW WE'VE HISTORICALLY DONE THINGS VERSUS HOW WE ARE GOING TO BE DOING THINGS. [01:00:05] PART OF HAVING A CONTINUOUS PROGRAM IS MAKING SURE YOU ARE MANAGING THAT PIPELINE RISK. IT'S DONE ALL THE TIME IN THE MORTGAGE INDUSTRY, AND IT'S A VERY MANAGEABLE, IT'S VERY LIQUID HEDGE. IT'S VERY EASY TO DO. THAT'S SOMETHING INSTEAD OF WHERE WE'VE ISSUED BONDS, SET THE RATE AND LET IT GO, WE'RE GOING TO BE HAVING A CONTINUOUS PROGRAM, CONSTANTLY ADJUSTING RATES TO MARKET, HEDGING THAT RISK TO WHEN WE ISSUE THE DEBT SO THAT WE'RE LOCKING IN OUR MARGINS AND MAKING ADJUSTMENTS AS WE GO. >> IT SEEMED TO ME, MR. CHAIRMAN, THAT IT'S GOING TO BE IMPORTANT GIVEN THE GROWTH AND THE DEVELOPMENT OF OUR EXISTING PROGRAM, THAT WE TAKE A HARDER LOOK PROSPECTIVELY AT THE MARGIN THAT WE'RE CHARGING, ESPECIALLY IF WE'RE IN A COMPETITIVE ENVIRONMENT TO MAKE SURE THAT WE UNDERSTAND THE MINIMUMS AND MAXIMUMS WE CAN CHARGE IN TERMS OF GETTING THE MARGIN RIGHT SO THAT WE CONTINUE TO HAVE A VERY COMPETITIVE VIABLE PROGRAM, BUT WE'RE NOT EXPOSED TO DOWNSIDE RISK IN THIS TYPE OF ENVIRONMENT. >> IT'S A GREAT POINT IN THAT THE WAY WE HAVE HISTORICALLY DONE THIS IS WE'LL DO THE BOND DEAL, WE'LL SET THE RATE, WE LOCK IN WHATEVER MARGIN WE HAVE, WE CAN MAKE ADJUSTMENTS TO THE MARKET WITHIN REASON. BUT WE'RE CAPPED. FEDERAL LAW PERMITS US TO MAKE ONE IN AN EIGHTH SPREAD ON OUR DEALS. YOU EFFECTIVELY DO HAVE A CAP. IF RATES ARE GOING UP, I CAN'T RAISE THE RATES, BUT I CAN RAISE THE RATES IF I'M LOOKING AT RATES GOING UP AND I CAN ISSUE NEW DEBT AND ADJUST BETWEEN DEALS AND MAINTAIN MY MARGIN ACROSS THOSE DEALS RATHER THAN I TALK ABOUT THIS ALL THE TIME. THE DEAL IN THE BUCKETS AND LOSING THE BUCKETS AND MAKING IT A CONTINUOUS PROGRAM. >> JUST HAVE A COUPLE OF QUESTIONS. >> PERFECT. >> INTERESTING THAT THE INSTRUMENT YOU'RE USING THE HEDGE IS A GINNIE MAE. IS THAT JUST BECAUSE IT'S IN THE SAME UNIVERSE? >> ANOTHER GREAT QUESTION YET. GINNIE MAE LOANS ARE FHA GUARANTEED LOANS, AND SO ALL OF OUR FHA LOANS THAT WE MAKE THROUGH OUR PROGRAM THE FIRST TIME AND A LOT OF OUR TBA LOANS AS WELL, ARE ALL FHA LOANS, WHICH MEANS THEY GET PULLED INTO GINNIE MAE MORTGAGE POOLS. THAT'S WHY WE'RE USING A LIKE INSTRUMENT ON THE HEDGE, THAT'S WHERE OUR MORTGAGES ARE GOING TO BE ORIGINATED, AND THEY ULTIMATELY BE SOLD INTO THE INDENTURE AS GINNIE MAE POOLS. >> GREAT. THEN THE RELATED TO, I THINK WHAT SOME OF THE BOARD MEMBERS HAVE BEEN BRINGING UP AS A CONCERN. WELL, FIRST OF ALL, I THINK THE POLICY COVERED YOU ALREADY. YOU DIDN'T HAVE TO COME TO US, BUT IT DOESN'T HURTS THAT MUCH. >> IS THERE SOME ENTITY, SOME PROFESSIONAL ADVISOR OUTSIDE OF YOURSELF AND YOUR TEAM THAT IS ALSO HELPING MONITOR AND SAYING, HEY, LOOK, WE HAVE THIS RISK THAT WE CAN GET RID OF? >> ABSOLUTELY. HERE. THEY'RE HERE. >> LET'S SAY THAT ALL. >> ST NICHOLAS HAS BEEN OUR FINANCIAL ADVISOR FOR A LONG TIME. WAS VERY INVOLVED IN THIS PROCESS WITH US. WE PRESENTED THE SCENARIO TO THEM. WE ALSO PRESENTED WHAT I WAS LOOKING TO DO TO OUR TBA PROVIDER, WHICH IS HILLTOP SECURITIES. THEY'RE ALSO A PROGRAM ADMINISTRATOR. BUT LOOKING AT THE RISK, ANALYZING WHERE WE WERE, HOW MUCH WE HAD TO LEND AND LOOKING AT IT AND SAYING, WHAT ARE THE CASH FLOW IMPLICATIONS? ALWAYS GO TO THE DOLLARS? AND SO LOOKING AT THE CASH FLOW IMPLICATIONS, PEOPLE RAN MULTIPLE SCENARIOS IN TERMS OF VARIOUS PREPAYMENT SPEEDS IN TERMS OF VARIOUS INTEREST RATE ENVIRONMENTS AND SCENARIOS. WE TRIED TO MAP THAT HEDGE TO COVER THOSE POTENTIAL FUTURE CASH FLOW DEFICITS WITHIN THE THE STRATEGY. >> REGULARLY MONITORED BY LOTS OF DIFFERENT SETS OF. >> IT WOULD BE MONITORED BY MY TEAM AND IT WILL BE MONITORED BY JOSH KARRAR, AND GARY MACHEK, WE WILL BE, JOINED AT THE HIP ON MONITORING THIS. IT'S A DYNAMIC RISK. WE HEDGE THAT DYNAMIC RISK AND WE'LL HEDGE IT TO A DYNAMIC MARKET. >> THEN FINALLY, SO I CAN TAKE IT TO THE BANK SO TO SPEAK ON SEPTEMBER 18TH 2020 TOLD, GOING TO TAKE IT TO THE BANK. [LAUGHTER] >> I THINK THE QUESTION IS WHETHER THEY GO 25 OR 50. I THINK THEY'VE PAINTED THEMSELVES INTO A PLACE WITH THEIR LANGUAGE THAT THEY WILL DO SOMETHING. HISTORICALLY, THERE'S BEEN A SEPARATION BETWEEN, THE FED NOT WANTING TO EVEN THOUGH IT'S NOT [01:05:01] A POLITICAL ENTITY TO GOING AHEAD OF AN ELECTION. BUT I THINK THE FED HAS ACTUALLY DONE A MASTERFUL JOB OF COMING OUT OF A REALLY TOUGH ENVIRONMENT? AND I THINK THEY'VE CERTAINLY TELEGRAPHED AT LEAST THE 25. I THINK THE HEDGE, WE'D WANT TO GET THAT IN PLACE WHERE WE'RE AT RISK IS, WE TALK ABOUT VOLATILITY VERSUS FUNDAMENTAL RISK. DO YOU WANT TO GET A HEDGE ON WHEN YOU COULD HAVE SURPRISES ON MULTIPLE EVENTS, WHERE THE FED MAYBE GOES 50 INSTEAD OF 25, WE PROBABLY SHOULD HAVE HAD THE HEDGE ON. IF YOU GET AN ELECTION RESULT THAT THERE'S A LOT OF VOLATILITY. WE'RE NOT ONLY JUST MANAGING THE FUNDAMENTAL INTEREST RATE RISK HERE. THERE'S A VOLATILITY TRADE AT PLAY THAT WE NEED TO MANAGE AROUND AS WELL, WHICH IS WHY WE'RE LOOKING INITIALLY GOING WITH A 50% HEDGE RATHER THAN A 100% HEDGE. >> CORRECT. BUT FOR EVERYONE TO NOTE, THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS OR ITS REPRESENTATIVES DO NOT OFFER PERSONAL FINANCIAL CONSULT WITH YOUR PERSONAL FINANCIAL ADVISOR. ARE THERE ANY OTHER QUESTIONS? HERE AND NONE, I'LL ENTERTAIN A MOTION ON ITEM 18 OF THE AGENDA. >> MR. CHAIRMAN, I MOVE THE BOARD APPROVE THE AUTHORIZATION TO HEDGE POTENTIAL PAYMENT AND SPREAD EXPOSURE RELATING TO INTEREST RATE RISK ON ORIGINATED MORTGAGE LOANS, ALL AS DESCRIBED IN THE BOARD ACTION REQUEST AND ASSOCIATED DOCUMENT ON THIS ITEM. >> I SECOND. >> MOTION MADE BY MR. THOMAS, SECONDED BY MISS CONROY. ALL THOSE IN FAVOR, SAY AYE. >> AYE. >> AYE. >> ANY OPPOSED? HERE AND NONE. MOTION GOES. >> THANK YOU ALL. >> THANKS. >> ITEM 19 OF THE AGENDA. PRESENTATION, DISCUSSION AND POSSIBLE ACTION REGARDING A WAIVER OF TTAC SECTION 11.101 B1A7 OF THE QAP RELATED TO THE PERCENTAGE OF EFFICIENCY AND OR ONE BEDROOM UNITS FOR PARMER NORTH. >> MISS CONROY. >> GOOD MORNING, TDHCA MORALS, DIRECTOR OF MULTIFAMILY BONDS. I JUST LEARNED THIS MORNING THAT THE APPLICANT WISHES TO WITHDRAW THIS WAIVER REQUEST. >> VERY GOOD. EFFICIENT PRESENTATION. THANK YOU. ITEM 20. PRESENTATION, DISCUSSION OF POSSIBLE ACTION ON AN ORDER PROPOSING REPEAL OF TINA CHAPTER 10, SUBCHAPTER F, COMPLIANCE MONITORING RULE, AND ORDER PROPOSING NEW TDHCA CHAPTER 10, SUBCHAPTER F, COMPLIANCE MONITORING AND DIRECTING ITS PUBLICATION FOR PUBLIC COMMENTS IN THE TEXAS REGISTER. >> GOOD MORNING, CHAIRMAN. BOARD MEMBERS AND MR. WILKINSON. WENDY QUACKENBUSH, THE DIRECTOR OF MULTIFAMILY COMPLIANCE. WE ARE SEEKING APPROVAL ON PROPOSING THE REPEAL OF THE COMPLIANCE MONITORING RULE, CHAPTER 10, SUBCHAPTER F, AND PROPOSING A NEW COMPLIANCE MONITORING RULE, CHAPTER 10, SUBCHAPTER F FOR THE PUBLICATION FOR PUBLIC COMMENT IN THE TEXAS REGISTER. THE PUBLIC COMMENT PERIOD WILL BE FROM SEPTEMBER 20TH THROUGH OCTOBER 20TH. THE MOST SIGNIFICANT PROPOSED UPDATES TO THE RULES ARE THE ADDITION OF NEW LANGUAGE TO CLARIFY THAT OWNERS ARE RESPONSIBLE FOR MAINTAINING COMPLIANCE, EVEN IF THE OWNER IS USING A MANAGER AND OR A MANAGEMENT COMPANY SERVICES. THE LANGUAGE ALIGNS WITH THE REQUIREMENTS AND THE ENFORCEMENT AND DEPARTMENT RULES IN CHAPTER 2. IN ADDITION, NEW LANGUAGE IS BEING PROPOSED, ADDING FOR PROPERTIES THAT HAVE ELECTED AVERAGE INCOME MINIMUM SET ASIDE, THAT A WAIVER FOR FAILURE TO COMPLY WITH PROCEDURAL REQUIREMENTS AS ALLOWED IN THE AVERAGE INCOME TEST REGULATION PUBLISHED IN THE FEDERAL REGISTRY ON OCTOBER 12, 2022. THIS SAFE HARBOR LANGUAGE IS CODIFYING AN EXISTING PRACTICE OF ALLOWING AN OWNER TO ADDRESS NON COMPLIANCE WITH CERTAIN PROCEDURAL REQUIREMENTS, SUCH AS THE DESIGNATION OF QUALIFIED GROUP OF UNITS THAT SATISFY THE AVERAGE INCOME TEST. DEPARTMENT HAS RECEIVED SEVERAL REQUESTS TO PROVIDE COMFORT LETTERS FOR THIRD PARTY ENTITIES SUCH AS LIMITED PARTNERS AND SYNDICATORS, THAT THE AGENCY WILL ALLOW THE CORRECTION OF NON COMPLIANCE IN ACCORDANCE WITH THE FEDERAL REGISTRY, A REGULATION, EXCUSE ME. STAFF IS ALSO PROPOSING NEW LANGUAGE IN SECTION 10.611 TO CLARIFY THAT MULTIFAMILY DIRECT LOAN PROGRAMS MUST HAVE INCOME AND ASSET VERIFICATIONS FOR ALL REQUIRED CERTIFICATIONS. FOR EXAMPLE, UNDER THE HOME PROGRAM, HOUSEHOLDS MUST BE INITIALLY CERTIFIED WITH SOURCE DOCUMENTATION OF INCOME AND ASSETS EVERY SIX YEARS OF THE PROPERTIES AFFORDABILITY PERIOD. [01:10:06] ALSO INCLUDED IN 611 IS THE PROPOSED ADDITION OF WHEN A PROPERTY MAY AND MAY NOT UTILIZE A SECTION 8 VERIFICATION FORM. THE SECTION 8 VERIFICATION FORM MAY BE UTILIZED TO DOCUMENT A HOUSING CHOICE VOUCHER HOUSEHOLD, INCOME AND ASSETS IN LIEU OF ACTUALLY OBTAINING SOURCE DOCUMENTATION OF INCOME AND ASSETS TO DEMONSTRATE THE HOUSEHOLD IS INCOME QUALIFIED FOR A LOW INCOME UNIT. UNDER THE HOUSING OPPORTUNITY THROUGH MODERNIZATION ACT, KNOWN AS HOTMA. GUIDANCE ALLOWS IN CERTAIN CIRCUMSTANCES THE USE OF FEDERAL MEANS TESTED PROGRAMS, SUCH AS TEMPORARY ASSISTANCE FOR NEEDY FAMILIES OR MEDICA TO VERIFY GROSS INCOME TO DOCUMENT A HOUSEHOLD'S INCOME QUALIFIED STATUS. THE DEPARTMENT IS NOT ADOPTING OTHER MEANS TESTED VERIFICATIONS, EXCEPT FOR THE SECTION EIGHT VERIFICATION FORM TO DOCUMENT A HOUSEHOLD'S INCOME QUALIFIED FOR A LOW INCOME UNIT. IN ADDITION, STAFF IS PROPOSING TO EXPAND THE REQUIREMENT OF LOW INCOME HOUSEHOLD STATUS CANNOT BE REMOVED BECAUSE THE HOUSEHOLD EXPERIENCES AN INCREASE AT INCOME AT RECERTIFICATION UNLESS THAT INCREASE CAUSES THE UNIT TO GO OVER INCOME IN ACCORDANCE WITH SECTION 42 AND OR THE HOME FINAL RULE. THE LAST SUGGESTED CHANGE IN THIS SECTION IS CODIFYING AN EXISTING REQUIREMENT, AND INTERNAL POLICY THAT INCOME AND ASSET VERIFICATIONS USED TO DETERMINE IF A HOUSEHOLD IS LOW INCOME MUST BE DATED WITHIN 120 DAYS OF THE CERTIFICATION EFFECTIVE DATE WITH SOME EXCEPTIONS. THE EXCEPTIONS ARE LIFETIME BENEFITS, MEANING THAT THE AMOUNT OF INCOME DOES NOT CHANGE, SUCH AS FOR CERTAIN PENSIONS AND ANNUITIES. SOME OF THE OTHER SUBSTANTIAL UPDATES INCLUDE ADDING LANGUAGE TO 10.612, THE BOND RECERTIFICATION REQUIREMENT THAT BOND PROPERTIES WITH LESS THAN 100% OF THE UNITS ARE SET ASIDE FOR HOUSEHOLDS WITH INCOMES LESS THAN 50 OR 60%, MUST COMPLETE FULL ANNUAL INCOME RECERTIFICATIONS WITH SOURCE DOCUMENTATION. THE ADDITION IS THAT IN THE FUTURE LEGISLATION ALLOWS FOR THE USE OF AVERAGE INCOME MINIMUM SET ASIDE FOR THE BOND PROGRAM, THAT INCOME THRESHOLD WILL INCREASE TO 80%. TO SIMPLIFY COMPLIANCE MONITORING RULES, STAFF REMOVED ALL SECTION 811 PRA REFERENCES FROM VARIOUS PARTS OF THE RULE AND ADDED ALL SECTION 811 PROGRAM REQUIREMENTS UNDER ONE SECTION AND 10.624. NEW LANGUAGE WAS ADDED TO 10.613 THAT PROPERTIES WITHIN A 100 YEAR FLOODPLAIN MUST STATE IN THE TENANTS RIGHTS AND RESOURCES G, IF A PROPERTY SITE IS LOCATED IN A FLOODPLAIN AND SUCH PROPERTIES MUST MAINTAIN FLOOD INSURANCE. THIS REQUIREMENT IS FROM THE QUALIFIED ALLOCATION PLAN AND WILL BE CODIFIED IN THE COMPLIANCE RULES AS THIS IS A NEW MONITORING REQUIREMENT. STAFF PROPOSES THE ADDITION OF NEW LANGUAGE IN 10.614 THAT ADDRESSES RENEWABLE ENERGY SOURCES FOR THE CALCULATION OF UTILITY ALLOWANCES. THE PROPOSED RULE CLARIFIES THAT TENANTS MUST DIRECTLY BENEFIT FROM RENEWABLE ENERGY SOURCE FOR IT TO BE INCLUDED IN THE UTILITY ALLOWANCE CALCULATION. OTHER CHANGES IN THE UTILITY ALLOWANCE SECTION INCLUDE THAT ANY RATE PLAN USED TO CALCULATE A UTILITY ALLOWANCE, THE PLAN MUST BE AVAILABLE TO ALL TENANTS IN THE BUILDING. IN ADDITION, PROPERTIES IN DEREGULATED AREAS MUST USE A SERVICE PLAN FROM THE POWER TO CHOOSE WEBSITE TO ENSURE TENANTS CAN REVIEW RATE PLANS USE FOR THE CALCULATION OF THE UTILITY ALLOWANCE. NEW LANGUAGE WAS ADDED TO 10.618, THAT IF INSPIRE PHYSICAL INSPECTION SCORE THAT RESULTS IN 70 OR BELOW DURING AN INSPECTION, THE DEVELOPMENT IS DEEMED TO OR THE DEVELOPMENT IS DEEMED TO BE IN POOR CONDITION, THAT THE DEVELOPMENT IS SUBJECT TO AN ACCELERATED INSPECTION SCHEDULE. THIS IS ALREADY IN PRACTICE, AND TO BE TRANSPARENT, WE ARE CODIFYING THE EXISTING STANDARD OPERATING PROCEDURE. AND 10.619 AND 10.620. STAFF PROPOSES ADDING THE APPLICATION FOR FUNDING AS A BINDING DOCUMENT IN ORDER TO MONITOR FOR SOCIAL SERVICES, NON PROFITS, HISTORICALLY UNDER UTILIZED BUSINESSES, [01:15:01] AND CHODOS AND INSTANCES WHERE A REVIEW IS MONITORING REVIEW IS COMPLETED PRIOR TO THE LA BEING RECORDED. LASTLY, IN 10.622, STAFF PROPOSES THAT RESIDENTS MUST BE GIVEN AT LEAST ONE OPTION TO PAY RENT THAT DOES NOT RESULT IN ADDITIONAL FEES. STAFF RECOMMENDS APPROVAL OF THE PROPOSED REPEAL AND NEW RULE TO BE PUBLISHED FOR PUBLIC COMMENT IN THE TEXAS REGISTER. I'M HAPPY TO ANSWER ANY QUESTIONS. >> THANK YOU. JUST TO REITERATE THE LAST PART YOU JUST SAID, THIS IS GOING IS GOING TO BE PUBLISHED IN TEXAS REGISTER. IT'S OPEN FOR PUBLIC COMMENT. >> YES, SIR. THE LAST ITEM YOU JUST SAID ALTERNATIVES TO PAY RENT WITHOUT ADDITIONAL FEES. DOES THAT HAVE TO ACCEPT CASH? >> NO, ABSOLUTELY NOT. NO TO ACCEPT CASH. BUT SOME DEVELOPMENTS ARE USING ONLINE SERVICES THAT IF YOU PAY WITH A CREDIT CARD OR A DEBIT CARD THAT CAN RESULT IN A CUSTOMARY FEE OF LIKE $3 OR $4. WE SAY IN ACCORDANCE WITH IRS REGULATIONS, YOU MUST ALLOW A RESIDENT TO PAY RENT THAT DOES NOT COST THEM MONEY. NO MEANING THAT THEY CAN'T USE A CREDIT CARD IF THEY CHOOSE TO, BUT A LOT OF OUR SENIOR PROPERTIES DON'T WANT TO PAY EXTRA FEES TO PAY RENT. >> GREAT. JUST TO CLARIFY ON THE AVERAGE INCOME OPTIONS? >> YES, SIR. >> I'VE ACTUALLY ASKED STAFF TO GIVE A STUDY OR PROVIDE A STUDY ON MY CONCERN IS THAT WHEN WE SWITCH THE AVERAGE INCOME, WE START ELIMINATING SOME OF THE EXTREMELY LOW INCOME, THE 30% TYPE OF UNITS BY DOING THAT. I WANT EVERYONE TO KNOW THAT'S STILL BEING LOOKED AT TO MAKE SURE WE'RE NOT AWARDING CREDITS UNDER ONE SCENARIO AND THEN SUDDENLY THAT MOST NEEDY SECTION IS GETS DROPPED OUT BECAUSE OF THIS AVERAGE INCOME. ARE THERE OTHER OPTIONS NOT ON THE POWER TO CHOOSE WEBSITE THAT COULD BE USED? >> YES, SIR. THERE IS. THERE ARE OTHER ENTITIES THAT PUBLISHED THAT DO NOT. MOST ENTITIES DO PUT THEIR RATE PLANS ON THE POWER TO CHOOSE. THERE ARE SOME THAT DO NOT. BUT FOR TO BE TRANSPARENT AND TO ALLOW RESIDENTS TO KNOW WHERE THE RATE PLAN COMES FROM, WE WOULD LIKE TO EXCLUSIVELY USE THE POWER TO CHOOSE WEBSITE. >> THAT'S PRETTY STANDARD ACROSS. >> YES. >> STATE OF TEXAS. BOARD MEMBERS HAVE QUESTIONS FOR? WELL, HEARING NONE, I WILL ENTERTAIN A MOTION ON ITEM 20 OF THE AGENDA. >> I MOVE THE BOARD APPROVE THE PROPOSED REPEAL AND PROPOSED NEW CHAPTER 10 SUBCHAPTER F, THE COMPLIANCE MONITORING RULE FOR PUBLICATION IN THE TEXAS REGISTER FOR PUBLIC COMMENT. ALL IS DESCRIBED AND AUTHORIZED IN THE BOARD ACTION REQUESTS, RESOLUTION, AND ASSOCIATED DOCUMENTS ON THIS ITEM. >> SECOND. >> MOTION MADE BY MISS CONROY, SECONDED BY MS. FARIAS. ALL IN FAVOR AYE. >> AYE. >> ANY OPPOSED, HEARING NONE. MOTION CARRIES. THANK YOU, WENDY. I'M 21, PRESENTATION, DISCUSSION, THE POSSIBLE ACTION AUTHORIZING THE DEPARTMENT TO SUBMIT AN APPLICATION FOR THE US DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTS FOSTER YOUTH TO INDEPENDENCE INITIATIVE AND SUCCESSFULLY AWARDED TO OPERATE SUCH A PROGRAM. LET'S GO. MR. WILKINSON. >> GOOD MORNING, BOARD CHAIR AND MEMBERS AND MR. WILKINSON. THAT WAS A MOUTHFUL. I KNOW IT WAS. IT'S GOING TO BE A MOUTHFUL FOR ME TO SAY IT. THIS MORNING, I WANT TO GO AHEAD AND PRESENT ITEM 21. WE'RE LOOKING FOR POSSIBLE ACTION AUTHORIZING THE DEPARTMENT TO SUBMIT AN APPLICATION FOR FYI VOUCHERS, FOSTER YOUTH INITIATIVE, AND IF SUCCESSFULLY AWARDED TO OPERATE THE PROGRAM. THE FYI PROGRAM IS AIMED TO PROVIDE RENTAL ASSISTANCE VOUCHERS TO YOUTH AGE 18-24, WHO ARE EITHER TRANSITIONING OUT OF FOSTER CARE OR ARE SET TO EXIT FOSTER CARE WITHIN 90 DAYS PER THE TRANSITIONAL PLAN. UNDER SECTION 4755 OF THE SOCIAL SECURITY ACT AND WHO ARE EITHER HOMELESS OR AT RISK OF BEING HOMELESSNESS. >> THE DEPARTMENT IS ELIGIBLE TO PARTICIPATE IN THE FY VOUCHERS AS A PUBLIC HOUSING AUTHORITY BECAUSE WE CURRENTLY ADMINISTER HOUSING CHOICE VOUCHERS CURRENTLY. PER THE PIH NOTICE, 2023 04, IT PERMITS THE SUBMISSION OF A NON-COMPETITIVE APPLICATION FROM PHA, WHICH IF APPROVED IT ALLOWS THE PHA TO UTILIZE UP TO 25 FY VOUCHERS FOR THE FIRST YEAR, [01:20:05] AND THEN FOLLOWING THE SECOND YEAR, WE CAN GO UP TO UP TO 50 VOUCHERS IN THE FOLLOWING YEAR. THIS IS ALL CONTINGENT UPON FUNDING AND AVAILABILITY REGARDING THE UTILIZATION RATES. THEREFORE, STAFF HAS RECOMMENDED THE DEPARTMENT SUBMIT AN APPLICATION TO ADMINISTER THE FY VOUCHERS UNDER THE NON-COMPETITIVE APPLICATION PROCESS. I DO NEED TO APOLOGIZE, THERE WERE TWO EXHIBITS THAT WERE MISSING FROM THE BOARD ITEM. THEY WERE NOT PUBLISHED ON THE PORT BOOK. ONE OF THE EXHIBITS IS A DRAFT JUST A MEMORANDUM OF UNDERSTANDING. BASICALLY, THIS IS A SETUP BY THE DEPARTMENT OF FAMILY PROTECTIVE SERVICES, WHICH IT ALLOWS US TO NEGOTIATE, BUT THERE'S NO FUNDING INVOLVED WITH THIS FORMAT. IT IS BASICALLY LETTING EACH PROGRAM KNOW WHICH RULES YOU NEED TO BE FOLLOWING LIKE A A FORMALITY FOR LETTING THE PHA KNOW, THIS IS WHAT YOU NEED TO BE DOING, YOUR RESPONSIBILITIES, AND THIS IS WHAT THE DFPS THAT THEY'RE GOING TO BE DOING, RESPONSIBILITIES. ALSO, STAFF WILL COLLABORATE WITH OUR LEGAL DEPARTMENT TO GET THIS MOU APPROVED. THEN THERE'S AN ADDITIONAL ITEM THAT WAS NOT PUBLISHED AS WELL, WHICH IS IT LIST ALL THE PHAS THAT ADMINISTER FY VOUCHERS IN TEXAS. SOME AS FEW AS TWO VOUCHERS ARE IN USE, AND MAJORITY OF THESE VOUCHERS THAT ARE CURRENTLY BEING USED HAVE A MAXIMUM OF 75 VOUCHERS. EVENTUALLY ONE DAY, BASED OFF THE DECISION TODAY AND BASED OFF APPROVAL, IF WE GET APPROVED FOR THEM, OUR GOAL IS TO HAVE 75 VOUCHERS OF FY VOUCHERS. THIS CONCLUDES MY PRESENTATION. IF YOU HAVE ANY QUESTIONS. I'M HERE TO ANSWER ANY QUESTIONS. >> THANK YOU. WE ARE INVOLVED. OUR DEPARTMENT IS INVOLVED WITH SOME OF THESE YOUTH TRANSITION TYPES OF VOUCHERS. >> THIS WILL BE THE FIRST TIME. >> WELL, UNDER OTHER PROGRAMS, DO WE HAVE? >> WELL, WE HAVE THE EMERGENCY HOUSING VOUCHER PROGRAM, BUT NONE OF THEM BETWEEN THE AGES OF 23 OUT OF FOSTER CARE. >> I THINK 811. HERE WE WITH SOME DEVELOPMENTAL DISABILITY AT COMBO. BUT YEAH, SO WE'VE BEEN DOING SOME OF THAT. THIS IS NEW FOR US. WHICH COUNTIES ARE WE GOING TO BE OPERATING IN JUST THE ONES WE DO HOUSING CHOICE VOUCHERS? >> WE'RE LOOKING FOR THE STATEWIDE. >> STATEWIDE? >> YES. >> THAT'LL BE GREAT. >> AGAIN, I THINK THIS IS AN EXCITING PROGRAM IF WE CAN FIND WAYS TO GET MORE FUNDING. I WOULD IMAGINE THE DEMAND IS WAY HIGHER THAN THE SUPPLY. >> YES. YES, IT IS. VERY CHALLENGING. BUT DEFINITELY STAFF IS READY AND EAGER TO EXPERIENCE WITH THESE VOUCHER HOLDERS. >> LET'S GET THE APPLICATION IN THE AND GET THE WORD. >> CHAIRMAN, I WANT TO CONGRATULATE THE DEPARTMENT IN PUTTING THIS TOGETHER. I REMEMBER WHEN I WAS IN THE BOARD OF REGENTS OF TEXAS WOMAN'S UNIVERSITY, SOMETIMES SOME OF THE STUDENTS THAT WOULD COME AND TALK TO US DURING THE MEETINGS WERE CHILDREN THAT HAD AGED OUT OF FOSTER CARE. SOMEHOW THEY HAD SURVIVED AND THEY WERE IN COLLEGE. IT WAS JUST HEARTBREAKING TO HEAR THE STORIES THAT SOME OF THEM JUST LIVED REALLY OFF THE STREET BENCHES, MAYBE THEY HAD AN OLD CAR. A LOT OF UNIVERSITIES GOT TOGETHER. I'M VERY PROUD TO SAY SIR THAT WHEN I WORKED UNDER SECRETARY BEN CARSON WHO UNDERSTOOD SECTION 8 IN PUBLIC HOUSING, HERE YOU PUSHED FOR THIS. ANYTHING WE CAN DO? ABSOLUTELY. I MEAN, IT IS THIS ARE FOR THE KIDS THAT HAVE SURVIVED IN SPITE OF EVERYTHING ELSE. >> YES. DEFINITELY. >> IT'S FOR THE SURVIVORS. >> THANK YOU. >> CONGRATULATIONS. >> THANK YOU. >> MR. CHAIRMAN, I'D LIKE TO ASK A QUESTION. >> SURE. >> I'M REALLY THANKFUL THAT YOU'RE APPLYING THAT YOU'RE SEEKING TO DO THIS. DO YOU SO I COMMEND YOU FOR THIS BECAUSE I KNOW THAT IT'S VERY DIFFICULT THAT CHILDREN IN FOSTER CARE ONCE THEY TURN 18 ARE EXPECTED TO BASICALLY FEND FOR THEMSELVES. WHEN YOU TALK TO A LOT OF YOUR PEERS, THEY WON'T EVEN LET THEIR 18-YEAR-OLD DRIVE, MUCH LESS TAKE OVER CONTROL OF THEIR LIVES. I APPRECIATE WHAT YOU'RE DOING. IF THIS IS SUCCESSFUL, IT'S 75, BUT DO YOU ALL HAVE ANY IDEA OF HOW MANY CHILDREN AGE OUT OF FOSTER CARE AND ARE ON THEIR OWN? WHAT IS DEMAND ACROSS THE STATE? >> WE HAVE A GOOD NUMBER, YET WE ARE WORKING WITH DFPS NOW AND WE MEET REGULARLY JUST TO FIND OUT WHAT THE NEED IS. THERE ARE NEEDS RIGHT NOW IN CERTAIN AREAS THAT LIKE IN TRAVIS COUNTY, BEAR COUNTY AREA. BUT WE'RE TRYING TO SEE IF WE CAN POSSIBLY EXTEND THIS OUT TO THE RURAL AREAS WHERE WE PROVIDE HOUSING ASSISTANCE BECAUSE THERE HASN'T BEEN A PHA THAT PROVIDED THESE VOUCHERS BEFORE. [01:25:02] SO NOW THAT WE'RE WE'RE PUTTING A WORD OUT THERE, THERE HAS BEEN SOME BUZZ ABOUT THERE MIGHT BE SOME APPLICANTS THAT WANT VOUCHERS IN THESE AREAS. >> I'M THE CHAIR OF THE HEART GALLERY OF TEXAS FOR EL PASO, AND THE BOARD CHAIR. AND SO WE DO SEE THE NEED, WE DO HAVE A LOT OF CHILDREN BETWEEN THE AGES OF FIVE AND 17 WHO ARE CLOSE TO 18 THAT ARE LOOKING FOR HOMES OR, FOR A FAMILY. THESE 18 YEAR OLD, THEY'RE REALLY ON A FLOP? >> YES. >> I REALLY THANK YOU FOR WHAT YOU'RE DOING. >> THANK YOU. >> WITH THAT, I'D LIKE TO ENTERTAIN THE MOTION ON ITEM 21 OF THE AGENDA. >> MR. CHAIRMAN, I MOVE THE BOARD APPROVE THE AUTHORIZATION TO APPLY FOR PARTICIPATION IN THE NONCOMPETITIVE SET ASIDE OF THE FOSTER YOUTH TO INDEPENDENCE INITIATIVE, AND ENTER INTO A PARTNERSHIP AGREEMENT WITH THE DEPARTMENT OF FAMILY AND PROTECTIVE SERVICES TO FACILITATE THE APPLICATION AND THE ADMINISTRATION OF THE FYI INITIATIVE. AS DESCRIBED IN THE BOARD ACTION REQUEST, RESOLUTIONS, AND PRESENTATION ON THIS ITEM. >> SECOND. >> MOTION MADE BY MR. THOMAS, SECONDED BY MS. FARIAS. ALL OF THOSE IN FAVOR SAY AYE. >> AYE. >> AYE. >> ANY OPPOSED. MOTION CARRIES. THANK YOU. >> THANK YOU. >> I'M 22 OF THE AGENDA. PRESENTATION, DISCUSSION, AND POSSIBLE ACTION ON THE STATE FISCAL YEAR 2024 AND 2025, VETERANS TRANSITIONAL HOUSING PILOT PROGRAM AWARDS. >> GOOD MORNING, BOARD MEMBERS. I'M ROSIE FALCON, MANAGER OF HOMELESS PROGRAMS, AND I'LL BE PRESENTING THE AWARD RECOMMENDATIONS FOR THE VETERANS TRANSITIONAL HOUSING PILOT PROGRAM FOR FISCAL YEARS 24 AND 25. DURING THE REGULAR SESSION OF THE 88TH TEXAS LEGISLATURE, RIDER 19 WAS INCORPORATED INTO THE DEPARTMENT'S APPROPRIATION. THIS RIDER SET ASIDE $400,000 FOR EACH YEAR OF THE BANUM FROM WHAT NORMALLY WOULD BE RESERVED FOR HOMELESS HOUSING AND SERVICES PROGRAM OR OUR HHSP PROGRAM. THE VETERANS TRANSITIONAL HOUSING PILOT PROGRAM ADDRESSES THE HOUSING NEEDS OF VETERANS EXPERIENCING HOMELESSNESS OR THOSE AT RISK OF HOMELESSNESS IN THE CITIES OF AUSTIN, SAN ANTONIO, DALLAS, AND HOUSTON. ON MARCH 7TH, 2024, THE BOARD AUTHORIZED THE ISSUANCE OF CONTRACTS TO AMERICAN GA FORUM AND UNITED STATES VETERANS INITIATIVES FOR THE PROVISION OF SERVICES WITHIN THE CITIES OF DALLAS AND SAN ANTONIO FOR AMERICAN GA FORUM AND THE CITY OF HOUSTON FOR US TS. FOR THE SECOND YEAR OF THE BANAM, WE ARE ABLE TO AWARD AN ADDITIONAL $400,000 ALLOCATING $100,000 EACH FOR ORGANIZATIONS PROVIDING SERVICES IN AUSTIN, DALLAS, HOUSTON, SAN ANTONIO. THIS ALLOCATION AMOUNT IS A FIXED AMOUNT BASED ON THE REQUIREMENTS OF THE WRITER, SO THIS WOULD NOT GO TO TRADITIONAL ALLOCATION FORMULA OF ANY SORT. STAFF REVIEWED AMERICAN GA FORUM AND US VETERANS INITIATIVES CURRENT PERFORMANCE AND EXPENDITURE PLAN, AND TAKEN INTO ACCOUNT THE IMPENDING EXPENDITURE DEADLINES, HAS DETERMINED THAT THE MOST EFFECTIVE WAY TO QUICKLY MAKE FISCAL YEAR 25 FUNDS AVAILABLE TO THE COMMUNITY IS TO PROVIDE AN ADDITIONAL $100,000 THROUGH AN AMENDMENT FOR EACH OF THE CURRENT CONTRACTS. AT THE TIME OF APPLICATIONS FOR DALLAS, SAN ANTONIO, AND HOUSTON WERE AWARDED THEIR FORCED ALLOCATION. THE DEPARTMENT HAD NOT YET RECEIVED APPLICATIONS TO SERVE THE AUSTIN SERVICE AREA. THEREFORE, WE SERVED THE ORIGINAL $100,000 ALLOCATED FOR FISCAL YEAR 24 UNTIL THE DEPARTMENT CONTINUED TO IDENTIFY ELIGIBLE ORGANIZATIONS. THIS NOW WOULD MAKE A TOTAL OF $200,000 AVAILABLE FOR THE CITY OF AUSTIN TO AWARD TO ANY ORGANIZATION PROVIDING SERVICES DURING THE SECOND YEAR OF THE BANUM. PROGRAM STAFF REVIEWED THE APPLICATIONS RECEIVED AND DETERMINED AUSTIN TRAVIS COUNTY MENTAL HEALTH AND MENTAL RETARDATION CENTER. MET ALL OF THE CRITERIA NOTED IN OUR INVITATION TO APPLY. STAFF IS NOW RECOMMENDING THE BOARD APPROVED AN AWARD TO AUSTIN TRAVIS COUNTY MENTAL HEALTH AND MENTAL RETARDATION CENTER, TOTALING $200,000 FOR BOTH 24 AND 25 FUNDS. THIS CONCLUDES MY PREPARED REMARKS, BUT I'M HAPPY TO ANSWER ANY QUESTIONS. >> GOOD. THANK YOU, ROSIE. JUST TO REITERATE HOUSTON SAN ANTONIO ALREADY HAVE THE AWARD SUBMITTED. >> CORRECT. >> THIS WILL BE TO FILL IN THE AUSTIN PORTION. >> IT WOULD BE TO FILL IN THE AUSTIN PORTION, BUT ALSO TO ALLOW THE ORIGINAL CONTRACTS FOR THE SAN ANTONIO DALLAS AND HOUSTON AREA TO RECEIVE AN ADDITIONAL $100,000 THAT NOW BECAME AVAILABLE AS OF SEPTEMBER 1ST. >> EXCELLENT. DO WE HAVE QUESTIONS ON THIS ITEM. [01:30:02] AGAIN, THIS OBVIOUSLY, IT'S REALLY GREAT TO BE ABLE TO GET AT LEAST SOME FUNDS OUT THERE. WE KNOW THE NEEDS ARE MUCH LARGER THAN THIS, BUT THIS GREAT PROGRAM, PLEASE MAKE SURE A LOT PUBLICIZES THIS. >> IT'S AMAZING. THE STAFF IS REALLY EXCITED WITH THIS NEW PARTNERSHIP, INTEGRAL CARE OR TRAVIS AUSTIN TRAVIS COUNTY MENTAL HEALTH AND RETARDATION CENTER. THEIR PARTNERSHIPS ARE SO VAST THAT THEY ANTICIPATE SERVING 60 VETERAN HOUSEHOLDS. THIS WILL BE PART OF GAP FUNDING FOR THEIR VA VOUCHERS. THIS $200,000 IS GOING TO MAKE A GREAT IMPACT WITH THE PARTNERSHIP WITH THEM. >> GOOD. >> ANYTHING ELSE? I'LL ENTERTAIN A MOTION ON IT. >> WELL, CAN I ASK A QUESTION? >> SURE. >> THANK YOU. DO YOU SEE THIS PROGRAM EXPANDING OUT BEYOND THE FOUR CURRENT COMMUNITIES THAT IT'S SERVING? >> NOT THE WAY SO THIS IS A PILOT PROGRAM THAT CAME ABOUT WITH THE LAST LEGISLATURE. CURRENTLY, THE WAY THAT THE WRITER IS WRITTEN, IT WOULD NOT ALLOW FOR AN EXPANSION. WHAT WE COULD DO, IT COULD BE POSSIBLE THE LANGUAGE AND THERE IT JUST INDICATES FOUR AREAS OF THE STATE. WHAT WE DO IS WE TAKE THE MOST CURRENT POINT IN TIME COUNT TO DETERMINE WHICH AREAS HAVE THE HIGHEST CONCENTRATION OF HOMELESS VETERANS. TYPICALLY, THOUGH, WE DO HAVE TO DO THIS FOR OUR HHSP PROGRAM, AS WELL AS OUR ESG PROGRAM. WE DON'T SEE A LOT OF VARIANCE FROM THESE FOUR CITIES IN THAT SUBPOPULATION. >> I AM FROM EL PASO. WE DO HAVE FORT BIS AND WE DO HAVE A LOT OF A LOT OF VETERANS THERE. I WAS SURPRISED THAT THERE WAS JUST THOSE FOUR GIVEN THE SIZE OF FORT BIZ. >> THE DATA THAT WE USE TAKES INTO ACCOUNT UNSHELTERED HOMELESS VETERANS INDIVIDUALS. THAT DOES SKEW THE DATA OF WHAT YOU ACTUALLY SEE ON THE GROUND A LITTLE BIT. >> THANK YOU. >> MR. CHAIRMAN, MOTION. I MOVE THE BOARD APPROVED THE AUTHORIZATION TO TAKE ACTION TO EFTATE THE AWARD OF VETERANS TRANSITIONAL HOUSING PILOT PROGRAM TO AUSTIN TRAVIS COUNTY, MH MR CENTER. I TAKE ANY ACTIONS NECESSARY TO AMEND THE EXISTING AWARD TO THE AMERICAN GI FOR AND THE US VETERANS INITIATIVES TO INCLUDE 2025 FUNDS AND EXTEND THE TERMS OF THE CONTRACT. A DESCRIBED CONDITION IN THE BOARD AT REQUEST, RESOLUTIONS AND ASSOCIATED DOCUMENTS. >> I SECOND. >> THANK YOU. MOTION CARRIES MR. HARPER, SECONDS SAY AYE. >> AYE. >> OPPOSED HEARING NONE, MOTION CARRIES. REPORT. FUNDING TO EXPAND THE EL PASO S. FORTUNE ITEM 23 OF THE AGENDA. PRESENTATION DISCUSSION OF POSSIBLE ACTION ON THE PROPOSED REPEAL, TEN TECH CHAPTER 11, CONCERNING THE HOUSING TAX CREDIT PROGRAM, QUALIFIED ALLOCATION PLAN PROPOSED NEW TEN TECH CHAPTER 11, CONCERNING THE AND DIRECTING THEIR PUBLICATION FOR PUBLIC COMMENT TO THE TEXAS REGISTER. WE ARE GOING TO HAVE MR. CAMPBELL GO THROUGH ALL OF THE TOPIC AREAS LIST TO HIGHLIGHT. THEN WE WILL ENDEAVOR TO GROUP ITEMS TOGETHER. GROUP TOPICS TOGETHER. WE'LL GO BACK TO THE BEGINNING AND BILLY WILL CALL OUT A TOPIC AND WANT TO SPEAK ON THAT TOPIC. WE GOT TO RAISE YOUR HAND. WE'LL LOST SO, MR. CAMPBELL. [INAUDIBLE] >> THANK YOU. WE'VE JUST GOT SIX PEOPLE DOWN SO FAR, SO THAT SEEMS TO BE A GOOD SIGN. MY NAME IS CODY CAMPBELL. I'M THE DIRECTOR OF MULTIFAMILY PROGRAMS FOR THE DEPARTMENT. AS MR. VASC HAS JUST SAID, THIS ITEM CONCERNS THE QUALIFIED ALLOCATION PLAN OR QAP. THE QAP IS A SIGNIFICANTLY IMPORTANT RULE AS IT ESTABLISHES THE RULES AND SCORING CRITERIA FOR THE HOUSING TAX CREDIT PROGRAM, AS WELL AS THE REQUIREMENTS, SUCH AS UNDERWRITING GUIDELINES THAT ARE BROADLY APPLICABLE TO OUR OTHER MULTIFAMILY PROGRAMS. WE WORK ON THE QAP DURING THE SPRING OF EACH YEAR, AND THEN IN EARLY SUMMER, WE RELEASE A PRELIMINARY STAFF DRAFT FOR PUBLIC COMMENT. THIS YEAR, THE INFORMAL STAFF DRAFT WAS RELEASED ON AUGUST 12, AND IN TOTAL ABOUT 40 COMMENTS WERE SUBMITTED RELATED TO IT. THESE COMMENTS ARE AVAILABLE IN YOUR BOARD BOOK. DUE TO THE INFORMAL NATURE OF THE PRELIMINARY DRAFT PROCESS, THESE COMMENTS ARE NOT CONSIDERED FORMAL PUBLIC COMMENT, AND STAFF HAS NOT PROVIDED A REASONED RESPONSE TO ALL OF THEM. I'VE SAID THIS IN FRONT OF THE BOARD BEFORE. THE INFORMAL DRAFT IS NOT A REQUIRED PART OF STATUTE, BUT THIS IS SUCH A COMPLICATED RULE WITH SO MANY PLAYERS INVOLVED THAT IT'S REALLY VERY DIFFICULT TO GET IT RIGHT JUST WITH ONE VERSION OF IT. [01:35:03] WE GO THROUGH THE EXTRA WORK OF DOING TOO SO THAT WE CAN ENGAGE WITH PEOPLE AND END UP WITH A BETTER QAP. UPON YOUR APPROVAL TODAY, THE QAP WILL BE PUBLISHED IN THE TEXAS REGISTER, AND THEN FORMAL RULEMAKING WILL BEGIN. WE WILL AGAIN ACCEPT WRITTEN COMMENT ON THE QAP, AND AT THE NOVEMBER BOARD MEETING, A FINAL VERSION OF THE QAP WILL BE PRESENTED FOR APPROVAL. AFTER THAT, IT IS SENT TO THE GOVERNOR WHO MUST APPROVE IT, APPROVE IT WITH MODIFICATIONS, OR DISAPPROVE IT NO LATER THAN DECEMBER 1ST. THIS DRAFT OF THE QAP INCLUDES SOME PRETTY GOOD CHANGES. WE HAVE MADE SOME MODIFICATIONS TO THE UNDERSERVED AREA IN PROXIMITY TO JOB SCORING ITEMS THAT WE BELIEVE WILL OPEN UP ADDITIONAL GOOD REAL ESTATE TO BE COMPETITIVE IN THE PROGRAM. WE HAVE ALSO INCREASED THE MINIMUM AMOUNT OF CREDITS AVAILABLE IN THE SMALLER SUB REGIONS 600,000-750,000. WE HAVE INCREASED THE LIMIT ON ONE BEDROOM AND EFFICIENCY UNITS AT GENERAL DEALS 30-35%. THIS IS SOMETHING THAT WAS BROADLY REQUESTED BY THE INDUSTRY. THEY ACTUALLY ASKED FOR SOMETHING CLOSER TO 50%. IT'S BEEN 30% THE LAST COUPLE OF YEARS. WE OFFER 35 AS A COMPROMISE ON THAT. >> PLEASE CAN YOU REPEAT THAT LOUDLY? >> SURE. THAT WE OFFERED THIS IS A COMPROMISE OR. >> NUMBER PROPOSED. >>THIRTY FIVE PERCENT. YES. >> ONE CHANGE I WOULD LIKE TO SPECIFICALLY DRAW YOUR ATTENTION TO CONCERNS FORCE MAJEURE. THIS PROPOSED CHANGE WAS NOT INCLUDED IN THE INITIAL STAFF DRAFT, BUT WAS MADE IN RESPONSE TO TODAY'S AGENDA, WHICH INCLUDES 11 FORCE MAJEURE REQUESTS. I'M ALSO SPEAKING ABOUT THIS, JUST TO MAKE SURE THAT THE INDUSTRY IS AWARE OF IT. THIS WASN'T STRATEGICALLY LEFT OUT OF THE STAFF DRAFT. IT REALLY IS IN RESPONSE TO TODAY'S AGENDA. OVER THE LAST YEAR OR SO, WE'VE STARTED TO SEE REQUESTS COMING IN EARLIER AND EARLIER WITH MANY BEING SUBMITTED BEFORE THE DEAL IS EVEN CLOSED. WHILE STAFF UNDERSTANDS THAT DEVELOPERS AND INVESTORS ARE ACTING RATIONALLY WHEN THEY SEEK THESE EXTENSIONS SO EARLY IN THE PROCESS, WE HAVE REAL CONCERN THAT THE VOLUME OF THESE EARLY REQUESTS WILL CONTINUE INCREASING WITHOUT A RULE CHANGE. BECAUSE OF THAT, WE ARE PROPOSING THAT FORCE MAJEURE REQUESTS NOT BE ACCEPTED UNLESS CONSTRUCTION HAS ALREADY COMMENCED, AND THE DEVELOPMENT IS WITHIN 180 DAYS OF ITS DEADLINE TO PLACE IN SERVICE. BASICALLY, IF YOU'RE WITHIN SIX MONTHS OF YOUR DEADLINE, AND IT LOOKS LIKE YOU'RE NOT GOING TO MAKE IT, WE'LL ACCEPT THE FORCE MAJEURE REQUEST AND PRESENT IT TO THE BOARD. IF YOU'RE STILL 18 MONTHS AWAY, YOU'RE GOING TO HAVE TO HOLD ON BEFORE YOU REQUEST IT, AND WE'RE HOPING THAT THIS IS GOING TO LOWER THE VOLUME OF FORCE MAJEURE REQUESTS THAT COME. THIS IS THE SECOND VERSION OF THE QAP THAT THE INDUSTRY HAS SEEN, AND AS WOULD BE EXPECTED, STAFF HAS HAD NUMEROUS AND BY NUMEROUS, I MEAN MANY PHONE CALLS WITH THE INDUSTRY STAKEHOLDERS OVER THE LAST WEEK CONCERNING THIS MOST RECENT VERSION. BASED ON THOSE CONVERSATIONS, WE HAVE A FEW MODIFICATIONS TO THE QAP IN YOUR BOARD BOOK THAT WE WOULD LIKE TO SUGGEST. THE FIRST IS ON PAGE 65 OF THE QAP, AND I'M REFERENCING THE PAGE NUMBERS AT THE BOTTOM OF THE QAP, NOT THE PAGE NUMBERS OF YOUR BOARD BOOK. ON PAGE 65, YOU'LL FIND THE RENT LEVELS OF TENANTS SCORING ITEM. THE FIRST OPTION UNDER THIS SCORING ITEM AWARDS 13 POINTS TO DEVELOPMENTS THAT PROVIDE AT LEAST 20% OF THE UNITS TO HOUSEHOLDS EARNING 30% OR LESS OF AREA MEDIAN INCOME. THIS OPTION HAS HISTORICALLY ONLY BEEN AVAILABLE TO SUPPORTIVE HOUSING DEVELOPMENTS. THE INITIAL DRAFT OF THE QAP PROPOSED MAKING THIS OPTION AVAILABLE TO ALL APPLICANTS. HOWEVER, THE INDUSTRY BROADLY REJECTED THIS IDEA AS BEING FINANCIALLY INFEASIBLE TO ACCOMPLISH. IT WAS STAFF'S INTENTION TO RESTORE THE LANGUAGE TO ITS PREVIOUS FORM, MAKING THE SCORING OPTION AVAILABLE ONLY TO SUPPORTIVE HOUSING DEVELOPMENTS. HOWEVER, THIS WAS OVERLOOKED WHEN PREPARING THE FINAL DRAFT OF THE QAP. BY OVERLOOKED, I MEAN I OVERLOOKED IT. I WISH I COULD SAY IT WAS A TECHNOLOGICAL ERROR OR SOFTWARE GLITCH, BUT I JUST MISSED IT WHEN I WAS PUTTING THE FINAL QAP TOGETHER. WE DO RECOMMEND THAT THE BOARD MAKE THE CHANGE AND RESTORE THAT OPTION TO BEING ONLY AVAILABLE TO SUPPORTIVE HOUSING DEVELOPMENTS BEFORE APPROVING THE QAP. SECOND, AT THE BOTTOM OF THE SAME PAGE, PAGE 65, YOU'LL FIND CHANGES MADE TO THE RESIDENTS WITH SPECIAL HOUSING NEEDS SCORING ITEM. THE DEPARTMENT, AS BOBBY MENTIONED EARLIER TODAY, RECENTLY RECEIVED EIGHT MILLION DOLLARS IN FUNDING FROM HUD FOR THE SECTION 811 PROJECT RENTAL ASSISTANCE PROGRAM. THIS PROGRAM PROVIDES RENTAL ASSISTANCE TO EXTREMELY LOW INCOME PEOPLE WITH DISABILITIES. THE SPECIAL HOUSING NEEDS SCORING ITEM WAS MODIFIED THIS YEAR TO GIVE POINTS TO APPLICANTS THAT CHOOSE TO PARTICIPATE IN THIS PROGRAM. AS WRITTEN, THE RULES REQUIRE APPLICANTS TO COMMIT AT LEAST 10 UNITS TO THE 811 PROGRAM. UPON FURTHER REVIEW AND FURTHER DISCUSSION WITH THE INDUSTRY, STAFF HAS DETERMINED THAT THIS IS NOT THE BEST APPROACH AS IT DISPROPORTIONATELY IMPACTS SMALLER DEVELOPMENTS AND WILL LIKELY RESULT IN US PRODUCING FAR MORE 811 UNITS THAN WE CAN ACTUALLY SUPPORT WITH OUR EIGHT MILLION DOLLARS. STAFF INSTEAD RECOMMENDS THAT PARTICIPATING DEVELOPMENTS BE REQUIRED TO SET ASIDE 5% OF THE TOTAL UNITS FOR THE 811 PROGRAM. [01:40:03] MOVING FROM A FLAT 10 TO JUST 5% OF THE TOTAL UNITS, WE HAVE SPOKEN WITH OUR 811 ADMINISTRATORS, AND WE BELIEVE THAT THIS WILL PROVIDE ENOUGH UNITS FOR US TO USE UP THIS EIGHT MILLION DOLLARS. IT WORKS, MAKES THE INDUSTRY HAPPY. IT'S A GOOD COMPROMISE. WE HAVE TWO CHANGES THAT WE WOULD LIKE TO PROPOSE TO THE DEFINITION OF SUPPORTIVE HOUSING. THESE COMMENTS WERE SUBMITTED BY TWO OF OUR LARGER SUPPORTIVE HOUSING DEVELOPERS IN THE STATE FOUNDATION COMMUNITIES AND NEW HOPE HOUSING. THEY JOINTLY SIGNED THE LETTER, AND JOSH SAID THAT READING IT FELT LIKE SEEING A MARVEL DC MASH UP WITH BOTH OF THEM ON THE SAME COMMENT. THEY HAVE REQUESTED THAT SUPPORTIVE HOUSING DEVELOPMENTS BE REQUIRED TO PROVIDE 30 SQUARE FOOT OF COMMON AREA SPACE PER UNIT. WE FIND THAT TO BE A REASONABLE SUGGESTION AND RECOMMEND THAT THE BOARD INSERT IT INTO THE QAP. THEY ALSO HAVE SUGGESTED SOME MINOR CHANGES TO THE FINANCING REQUIREMENTS FOR SUPPORTIVE HOUSING DEVELOPMENTS. BECAUSE SUPPORTIVE HOUSING DEVELOPMENTS ARE VERY LIMITED IN CASH FLOW, THE DEPARTMENT HAS VERY STRICT REQUIREMENTS ABOUT WHAT DEBT THEY CAN CARRY AND HOW THAT DEBT CAN BE STRUCTURED, THEY HAVE MADE SOME REALLY, WHAT I WOULD CONSIDER TO BE COMMON SENSE SUGGESTIONS IN TERMS OF MODIFYING THAT TO ALLOW ADDITIONAL FUNDING SOURCES, SUCH AS THE CAPITAL MAGNET FUND OR THE FEDERAL HOME LOAN BANKS AFFORDABLE HOUSING PROGRAM. STAFF RECOMMENDS THAT THE BOARD INSERT THOSE CHANGES AS WELL. THIS IS A VERY SMALL CHANGE, BUT OUR TIE BREAKER DETERMINES PRIORITIES BASED ON A DEVELOPMENT SITES PROXIMITY TO A NUMBER OF COMMUNITY FEATURES, SUCH AS AN ELEMENTARY SCHOOL, A PUBLIC PARK, AND A PUBLIC LIBRARY. AN APPLICANT RECENTLY ASKED IF A PAID PUBLIC PARK, SUCH AS A MUNICIPAL GOLF COURSE, SHOULD BE ALLOWABLE FOR THE TIE BREAKER. STAFF SUGGESTS THAT PARKS THAT CHARGE ADMISSION SHOULD BE EXCLUDED FROM CONSIDERATION FROM THE TIE BREAKER AND RECOMMENDS ADDING LANGUAGE TO THAT EFFECT. I WILL SUMMARIZE ALL OF THIS AT THE END OF MY PRESENTATION. FINALLY, WE RECOMMEND ADDING A CAVEAT THAT THE QAP IS SUBJECT TO CHANGE AS A RESULT OF LEGISLATION. BECAUSE BILLS THAT ARE PASSED OFTEN GO INTO EFFECT IN THE MIDDLE OF THE QAPS LIFE CYCLE, IT IS POSSIBLE FOR THINGS SUCH AS THE PROGRAM CALENDAR TO CHANGE BEFORE THE QAP CAN BE UPDATED TO REFLECT THOSE CHANGES. NOW, MOVING ON FROM THE PROPOSED CHANGES, THERE ARE TWO TOPICS IN PARTICULAR ABOUT WHICH I BELIEVE YOU'LL BE HEARING A SIGNIFICANT AMOUNT OF PUBLIC COMMENT. THESE ARE THE QUANTITY OF LOW INCOME UNIT SCORING ITEM AND THE QUALIFICATIONS FOR THE AT RISK SET ASIDE. YOU'LL FIND THE QUANTITY OF LOW INCOME UNIT SCORING ITEM ON PAGE 62 OF THE QAP. THIS CATEGORY AWARDS POINTS TO APPLICATIONS THAT PROPOSE A NUMBER OF LOW INCOME UNITS THAT EXCEEDS A BASELINE, WHICH IS CALCULATED BASED OFF THE AVERAGE NUMBER OF UNITS CREATED IN THE SUBREGION IN THE 2022 AND 2023 COMPETITIVE ROUNDS. WE SAW A PRETTY BIG DIP IN 2023 IN THE NUMBER OF UNITS THAT WERE BEING PRODUCED BY THE HOUSING TAX CREDIT UNITS. THIS SCORING ITEM WAS ADDED TO THE QAP AS A WAY TO TRY AND BOOST THE NUMBER OF UNITS BEING PRODUCED. THE OPTIONS INCLUDE ONE POINT FOR INCREASING THE AVERAGE BY 10%, TWO POINTS FOR 20%, AND THREE POINTS FOR 50%. STAFF HAS ONE SPECIFIC CHANGE TO RECOMMEND IN CONNECTION WITH THIS ITEM. THE 50% SCORING ITEM WAS PREVIOUSLY AVAILABLE ONLY TO REHABILITATION DEVELOPMENTS THAT DO NOT CURRENTLY HAVE AFFORDABILITY RESTRICTIONS. STAFF REMOVED THIS REQUIREMENT FROM THE QAP. HOWEVER, THE INDUSTRY HAS BROADLY REJECTED THE CHANGE ON THE BASIS THAT IT IS NOT POSSIBLE TO REACH THIS BENCHMARK. BECAUSE OF THIS, STAFF RECOMMENDS RESTORING THE LANGUAGE THAT LIMITS THE 50% SCORING ITEM TO REHABILITATION DEVELOPMENTS ONLY. THE INDUSTRY IS ALSO CONCERNED WITH THE 10% AND 20% SCORING OPTIONS. AS THIS BOARD HAS HEARD, THE REQUIRED NUMBER OF UNITS TO BE PRODUCED GENERALLY EXCEEDS THE NUMBER THAT CAN BE SUPPORTED WITH THE CREDITS. THIS REQUIRES DEVELOPERS TO SEEK ADDITIONAL FUNDING IN ORDER TO MAKE THE PROJECT PENCIL OUT. BECAUSE OF THE LIMITED RENTS THAT CAN BE COLLECTED ON LOW INCOME UNITS, THE ADDITIONAL FUNDING OFTEN HAS TO COME IN THE FORM OF SOFT MONEY FROM LOCAL GOVERNMENTS, EITHER GRANTS OR LOANS WITH VERY FAVORABLE TERMS. DURING THE 2024 APPLICATION ROUND, APPLICANTS REPRESENTED APPROXIMATELY $106 MILLION IN SOFT FUNDING ON THEIR APPLICATIONS. WHILE THE TOTAL AMOUNT OF SOFT FUNDING AVAILABLE IN THE STATE IS NOT AVAILABLE, IT IS LIKELY THAT THIS $106 MILLION IS OPTIMISTIC AND THAT SOME OF THESE APPLICATIONS WILL HAVE TO RETURN THEIR CREDITS IF THE FUNDING CANNOT BE SECURED. IN ADDITION, ONE OF THE LARGEST SOURCES OF SOFT FUNDING OVER THE PAST FEW YEARS, HOME-ARP, WHICH WAS PROVIDED THROUGH THE AMERICAN RESCUE PLAN IS WINDING DOWN AND IS UNLIKELY TO BE AVAILABLE FOR 2025 APPLICANTS. THE DEPARTMENT ALSO ANTICIPATES RECEIVING LESS IN NATIONAL HOUSING TRUST FUND IN HOME NEXT YEAR THAN IT HAS IN RECENT YEARS. BECAUSE OF THIS, THE FUNDING NECESSARY TO MAKE THE SCORING ITEM WORK AS WRITTEN MAY SIMPLY NOT EXIST, AND THE BOARD MAY WANT TO CONSIDER MODIFYING THE SCORING ITEM TO REFLECT THAT. THE SIMPLEST CHANGE WOULD BE TO LOWER THE THRESHOLD FROM 10 AND 20%. THIS WOULD ENSURE THAT WE STILL HAVE A HEALTHY UNIT PRODUCTION WHILE PROVIDING RELIEF TO APPLICANTS. [01:45:02] THE SECOND ITEM THAT I BELIEVE YOU'LL RECEIVE A SIGNIFICANT AMOUNT OF COMMENT ON IS THE AT RISK SET ASIDE. THE AT RISK SET ASIDE IS ESTABLISHED IN STATE STATUTE, AND IT REQUIRES US TO RESERVE 15% OF OUR 9% HOUSING TAX CREDITS EACH YEAR FOR AFFORDABLE DEVELOPMENTS THAT ARE AT RISK OF LOSING AFFORDABILITY. AT MINIMUM, ONE THIRD OF THESE CREDITS OR 5% OF THE TOTAL CEILING MUST GO TO DEVELOPMENTS THAT RECEIVE ASSISTANCE FROM USDA. A USDA DEVELOPMENT MAY QUALIFY FOR BOTH THE USDA AND AT RISK SET ASIDES. THESE SET ASIDES WERE A SIGNIFICANT TOPIC OF DISCUSSION THIS YEAR AS USDA APPLICATIONS ENDED UP TAKING UP ABOUT HALF OF THE AVAILABLE CREDITS. TO HELP BALANCE THIS, STAFF PROPOSES TWO CHANGES IN THE QAP. FIRST, THAT USDA DEVELOPMENTS BE ELIGIBLE FOR THE USDA SET ASIDE FIRST, AND IF THEY AREN'T AWARDED FROM THAT POOL OF MONEY, THAT THEY ONLY BE ELIGIBLE TO RECEIVE AN ALLOCATION UNDER THE AT RISK SET ASIDE ONCE ALL OTHER NON USDA APPLICATIONS ARE FUNDED. SECOND, WE'VE PROPOSED A CHANGE TO THE QAPS PARAMETERS FOR WHAT IS CONSIDERED TO BE NEARING EXPIRATION IN TERMS OF THE DEVELOPMENTS AFFORDABILITY RESTRICTIONS. THIS PROPOSED CHANGE WOULD REQUIRE ANY CONTRACT THAT EXPIRES ANNUALLY, BUT IS SUBJECT TO AUTOMATIC RENEWAL, BE WITHIN TWO YEARS OF ITS PERMANENT EXPIRATION IN ORDER TO BE CONSIDERED AT RISK. REGARDING THESE TWO CHANGES, I REALLY DID BELIEVE THAT WE HAD FIGURED OUT A GOOD SOLUTION FOR THE USDA AND AT RISK SET ASIDES WITH THIS DRAFT OF THE QAP. UNFORTUNATELY, HAVING SPOKEN WITH NUMEROUS INDUSTRY STAKEHOLDERS OVER THE LAST WEEK, I'VE COME TO BELIEVE THAT WE MAY HAVE ACTUALLY MISSED THE MARK HERE. FRANKLY, NOT ONE PERSON THAT I'VE SPOKEN TO BELIEVES THAT THE CHANGES THAT WE'RE PROPOSING ACTUALLY FULLY ADDRESS ANYTHING, AND IT IS POSSIBLE THAT WE MAY HAVE INADVERTENTLY CREATED MORE HEADACHES FOR OURSELVES IN THE NEXT ROUND WITH THIS LANGUAGE. BECAUSE OF THIS, IT MAY BE PRUDENT FOR US TO HOLD OFF ON THESE CHANGES UNTIL WE CAN SPEND ADDITIONAL TIME WORKING WITH THE INDUSTRY TO COME UP WITH CHANGES THAT ARE SUPPORTED BY THE DEVELOPERS WITHIN BOTH OF THESE SET OF ASIDES. THIS CONCLUDES MY PREPARED REMARKS. AS I SAID EARLIER, I ANTICIPATE THAT WE WILL RECEIVE QUITE A BIT OF PUBLIC COMMENTS ON THIS ITEM, BUT I'M HAPPY TO ANSWER ANY QUESTIONS THAT THE BOARD MAY HAVE. >> THANKS, CODY. >> SURE. >> FOR ALSO GOING DOWN THE MAJOR TOPIC AREAS. >> SURE. >> I WANTED TO REITERATE A COUPLE OF THINGS THAT YOU MENTIONED. WE'RE GOING TO INSERT SOME LANGUAGE THAT WOULD ALLOW US, THE DEPARTMENT TO CHANGE THE WHOLE CALENDAR PROCESS OF THE TAX CREDIT REWARD CYCLE IF LEGISLATION ALLOWS US TO DO SO. >> CERTAINLY, AND NOT JUST THE PROGRAM CALENDAR, BUT ANY CHANGE THAT IS MADE AS A RESULT OF LEGISLATION COULD RESULT IN THE QAP BEING UPDATED IF THE LEGISLATION REQUIRES IT. >> CORRECT. THEN WHY DID THAT SUBSET OF THE 35% GAP ON SINGLE [OVERLAPPING] >> EFFICIENCIES IN ONE BEDROOMS. YES, SIR. >> ONE BEDROOMS. WE DISCUSSED DURING THE WHOLE YEAR ABOUT, ARE WE EXEMPTING ADAPTIVE REUSE FROM THAT REQUIREMENT? [OVERLAPPING] >> HISTORICAL STRUCTURE IS EXEMPT BUT A NEW CONSTRUCTION [INAUDIBLE] >> THAT'S EXACTLY CORRECT. >> EXTRA NEW BUILDINGS [OVERLAPPING] HISTORICAL STRUCTURES. >> I JUST WANT TO MAKE SURE THAT WAS IN ADDITION TO THE SENIOR BOARD. >> SURE. >> LET'S PICK ONE OF YOUR TOP [OVERLAPPING] WHO HAVE THE MOST COMMENTS. AS YOU'RE PICKING ONE OF THESE, LET THIS REITERATE AND I APPRECIATE YOUR COOPERATION THAT IF ONE OR TWO PEOPLE BEFORE YOU HAVE SAID WHAT YOU'RE ABOUT TO SAY, GO AHEAD JUST SAY YOU AGREE WITH WHAT HE SAID OR SHE SAID AND WE'LL NOTE THAT YOU SAID THE SAME THING. >> GREAT. I WOULD SUGGEST THAT QUANTITY OF LOW INCOME UNITS IS PROBABLY A GREAT PLACE TO START. >> DO WE HAVE SPEAKERS ON THAT TOPIC? HOW MANY MORE ARE GOING TO PROBABLY WANT TO SPEAK ON THIS QUANTITY OF LOW INCOME. TRACY? >> NO [OVERLAPPING] [LAUGHTER]. >> ALSO, BE SURE YOU ALL HAVE SIGNED IN ON THE SHEETS. I KNOW I SAW A BUNCH OF US SIGNING UP FRONT BENCH. >> CATHERINE SARR, WITH TAP. I AM THE QAP CHAIR FOR TAP, AND I HAVE ALREADY SIGNED IN. I JUST WANT TO FIRST SAY THANK YOU TO THIS BOARD AND STAFF BECAUSE THIS QAP THERE'S BEEN A LOT OF WORK ON IT, AND WE REALLY APPRECIATE ALL OF THE EFFORT AND CONSIDERATION THAT HAS GONE INTO IT. ON THE QUANTITY OF LOW INCOME UNIT ITEM, AS CODY HAS POINTED OUT, THE POLICY OBJECTIVE IS A GOOD ONE. [01:50:03] NO ONE IN THIS ROOM WOULD ARGUE THAT WE WANT LOW UNIT COUNTS. WE ALL WANT TO BE DOING MORE UNITS. BUT UNFORTUNATELY, THE ENVIRONMENT IN WHICH WE FIND OURSELVES, THE RESOURCES ARE SIMPLY NOT THERE TO PRODUCE THOSE ADDITIONAL UNITS, BECAUSE THE CREDITS ON THE 9% SIDE ARE CAPPED AT TWO MILLION DOLLARS. OVER 10 YEARS, THAT'S $20 MILLION IN CREDITS AND AN AVERAGE CREDIT PRICING OF 87 CENTS, WHICH MAY BE OPTIMISTIC. THAT'S $17.4 MILLION. ON A $25 MILLION DEVELOPMENT, THAT'S A FAIRLY LARGE AMOUNT THAT WOULD HAVE TO BE FINANCED WITH CONVENTIONAL DEBT AND, OR SOFT FINANCING. GIVEN THAT THE RENTS ARE FIXED AND THOSE INCREASES IN INSURANCE AND LABOR CAN'T BE PASSED ON TO THE TENANTS, THERE'S A HUGE GAP THAT GETS CREATED WHEN WE TRY AND DO ADDITIONAL LOW INCOME UNITS THAT AREN'T SUBSIDIZED BY THE TAX CREDITS. TAP'S RECOMMENDATION HERE IS WE CAN GO MULTIPLE WAYS. WE COULD LOWER THE PERCENTAGE. I THINK THE BETTER OPTION IS TO LEAVE IT AT 10 AND 20%, BUT TAKE THE AVERAGE OF ALL THE SUBREGIONS AND THEN DO A LOWER LIMIT. THE AVERAGE OF ALL THE URBAN SUBREGIONS TOGETHER IS 80 UNITS OVER THE TWO YEAR LOOK BACK. IF WE DID THE LESSER OF 80 UNITS OR THE NUMBER PRODUCED BY THE AVERAGE THAT YOU ALL PRODUCE, I KNOW IT'S A LITTLE BIT OF A CONVOLUTED STRUCTURE. THAT'S THE RECOMMENDATION THAT WE'VE MADE IN OUR BOARD BOOK. >> YOU'RE TRYING TO PUT ALL THE URBAN AREAS IN A ONE BIG POT AS THE COVERAGE? >> YES. THE RULE, YOU ARE TAKING AN AVERAGE OF ALL THE RURAL SUBREGIONS TO COME UP WITH THE NUMBER THAT YOU HAVE TO PRODUCE. IN THE URBAN SUBREGIONS, YOU'VE TAKEN AN AVERAGE OF ALL THE DEALS IN THAT SUBREGION. IN A LOT OF SUBREGIONS, THOSE UNIT COUNTS ARE ACHIEVABLE. BUT IN PLACES LIKE HOUSTON OR THE VALLEY, THE UNIT COUNTS ARE QUITE HIGH. FOR EXAMPLE, IN HOUSTON, YOU'RE REQUIRED TO DO 98 UNITS TO GET THE 20% SCORING ITEM AND THE CREDITS CAP OUT ABOUT AROUND 90 UNITS GIVE OR TAKE, DEPENDING ON THE SPECIFICS. THOSE ARE EIGHT UNITS ABOVE AND BEYOND WHAT THE TAX CREDITS CAN PAY FOR. IN PLACES WHERE THOSE UNIT COUNTS ARE HIGHER LIKE THAT, IT WOULD BENEFIT THE STATE FOR US TO HAVE SOME OTHER MECHANISM IN THOSE AREAS, AND THAT'S WHY WE PRESENTED THE LESSER OF THE REGIONAL AVERAGE OR THE STATE WIDE AVERAGE, AS OUR SUGGESTION. ANOTHER OPTION WOULD BE TO JUST LOWER THE PERCENTAGES. YOU'RE STILL GETTING A PREMIUM. >> DO THE STAFF HAVE ANY THOUGHTS ON THAT? >> I HAVE A QUESTION. >> KATHERINE, JUST TO CLARIFY, YOUR PROPOSAL IS THE LESSER OF THE AVERAGE OR THE STATE WIDE AVERAGE, WHICH IS ABOUT 80. >> CORRECT. >> BUT YOU WOULD STILL HAVE TO PRODUCE 10% OR 20% ABOVE THAT 80, SO WE'D BE LOOKING AT 88 AND 96 TO SCORE. >> YES. IT'S STILL A PREMIUM OVER THE AVERAGE. >> SURE. >> BUT IT WOULD GET US TO MORE ACHIEVABLE UNIT COUNTS, AND AGAIN, IN AN ENVIRONMENT WHERE WE DON'T HAVE THE SOFT FUNDING TO PAY FOR THOSE ADDITIONAL LOW INCOME UNITS. >> [INAUDIBLE] AVERAGE IS 60 AS OPPOSED 80. I'M JUST PICKING A NUMBER. >> SURE. >> THEN YOU [INAUDIBLE] THE BASIS FOR 10 AND 20% OF THAT 66 OR 72. >> CORRECT. THE OTHER OPTION IS TO JUST DO A FLAT PERCENTAGE. IF WE'RE TALKING ABOUT LOWERING THOSE PERCENTAGES, DOING 5 AND 7%, AGAIN, YOU'RE STILL GETTING A PREMIUM, BUT IT'S GOING TO BE HARDER TO ACHIEVE THOSE UNIT COUNTS IN PLACES LIKE THE VALLEY AND HOUSTON WHERE THE UNIT COUNTS ARE QUITE A BIT HIGHER THAN THE REST OF THE STATE. IN HOUSTON SPECIFICALLY, THOSE UNIT COUNTS ARE HIGHER BECAUSE WE'VE HAD SO MUCH SOFT FUNDING AVAILABLE IN PREVIOUS YEARS. AFTER HURRICANE HARVEY, THERE WAS A HUGE POT OF DISASTER RECOVERY MONEY THAT HELPED SUBSIDIZE THOSE INCREASED UNIT COUNTS, SO IT'S ARTIFICIALLY INFLATED ALREADY. [01:55:02] >> BUT THEN IF YOU'RE IN HOUSTON, FOR INSTANCE, YOU'RE ONLY COMPETING AGAINST HOUSTON PROPERTIES, HOUSTON DEVELOPMENTS. >> CORRECT. >> IF IT'S TOO HIGH, NO ONE'S GOING TO QUALIFY FOR THE BONUS POINTS. EVERYONE IS IN THE SAME PLAIN VIEW. >> EVERYONE WILL TAKE THE POINTS AND THEN SPEND SIX MONTHS TRYING TO FIGURE OUT HOW TO MAKE THAT DEAL WORK, AND THEN IT'S JUST GOING TO START PERPETUATING OUR NEED FOR EXTENSIONS UNDER FORCE MAJEURE. >> THAT'S NOT GOING TO HAPPEN. YOU'LL FIGURE IT OUT. BUT I UNDERSTAND WHAT YOU'RE PROPOSING. IF ANY OTHER BOARD MEMBERS HAVE QUESTION, BUT TO ME, IF EVERYONE'S PLAYING IN THE SAME POOL, YOU'RE NOT COMPETING. HOUSTON ISN'T COMPETING AGAINST SAN ANTONIO OR EL PASO. NO ONE COMPETING AGAINST HOUSTON. >> SURE. >> THEN EVERYONE'S AT THE SAME BASIS OF BEING ABLE TO GET THE EXTRA POINTS OR NOT, DOESN'T REALLY MATTER. >> I WILL TELL YOU THAT PEOPLE WILL TAKE THE POINTS AND AGAIN TRY AND FIGURE IT OUT. I KNOW OF AT LEAST THREE DEVELOPMENTS CURRENTLY THAT HAVE BEEN, I'M NOT GOING TO NAME THEM, 2024 DEVELOPMENTS THAT ARE NOW TRYING TO FIGURE OUT HOW TO MAKE THOSE UNIT COUNTS WORK BY GOING AND GETTING A TAX EXEMPTION OR BY DOING MAJOR VALUE ENGINEERING OR SOMETHING TO MAKE THOSE UNIT COUNTS THAT THEY PUT IN THEIR APPS WORK. >> IS THAT THE GOAL, I HOPE WHAT YOU TRY TO DO THIS FOR MORE UNITS? >> IT IS. >> THAT'S A GREAT INCENTIVE FOR THEM TO FIGURE OUT HOW TO WORK.. >> BUT AGAIN, THAT'S GOING TO TAKE TIME. THE UNIT COUNTS ARE JUST TOO HIGH AND THEY AREN'T SUPPORTED BY THE TAX CREDITS, AND THAT'S REALLY THE ISSUE IS THAT THERE AREN'T ENOUGH SOFT FUNDING AVAILABLE. AS CODY MENTIONED, THERE'S PROBABLY GOING TO BE RETURNS THAT HAPPEN IN NOVEMBER WHEN CARRYOVER HAPPENS AND WE DON'T GET THOSE COMMITTED FUNDS THAT ARE REQUIRED UNDER YOUR UNDERWRITING REPORT. YOU NOW HAVE A FINANCIALLY UNVIABLE TRANSACTION. >> WE CAN REUSE THOSE RETURNS FIST. >> YOU CAN IF YOU TAKE THEM BACK AT THAT TIME. >> I JUST DON'T SEE WHERE IT IS NOT GIVEN THAT COMPETITIVE ADVANTAGE TO ANY OTHER APPLICATION IN THAT REGION. >> I'M WORKING HARDER FOR THE HOUSTON FOLKS AND THAN IT IS FOR THE PEOPLE IN THE OTHER AREAS BECAUSE OF THEIR INFLATED UNIT COUNTS. >> SURE. I WILL TELL YOU THAT IN HOUSTON, I HAD FOUR SITES THAT I WAS WORKING ON AND I COULD NOT MAKE 98 UNITS WORK IN 2024, AND SO I DIDN'T SUBMIT THOSE APPLICATIONS BECAUSE I KNEW I WOULDN'T GET FUNDED. I DON'T HAVE TO SUBMIT THOSE APPLICATIONS AND SPEND 100 GRAND PUTTING IT TOGETHER. BUT THERE ARE PEOPLE THAT HAVE PUT IN THOSE APPS AND NOW IF THEY DON'T GET THEIR SOFT FUNDING, HAVE PROMISED SOMETHING THAT THEY CAN'T DELIVER. THAT'S REALLY THE ISSUE IS THAT THERE'S AN INCENTIVE TO GET THE CREDITS BY JUST MAKING SOMETHING WORK ON PAPER AND THEN TRYING TO FIGURE IT OUT LATER. WE WOULD HOPE THAT THIS BOARD WOULD NOT ALLOW THEM TO CONTINUE HOLDING ONTO THOSE CREDITS WHEN THOSE SOFT FUNDS DON'T COME THROUGH. >> IF I MAY, I HAVE SOME NUMBERS THAT I THINK MIGHT HELP THE BOARD CONCEPTUALIZE WHAT WE'RE TALKING ABOUT A LITTLE BIT MORE. I HAPPEN TO HAVE THE AVERAGES IN FRONT OF ME. THE PROPOSAL BEING MADE BY MRS. SARA WOULD REALLY ACTUALLY NOT AFFECT TOO MANY OF OUR REGIONS. MOST OF THEM HAVE AVERAGES THAT ARE BELOW 80 ALREADY. THE HOUSTON, FOR EXAMPLE, HAS AN AVERAGE OF 81.2, SO IF WE WERE TO ACCEPT THIS PROPOSAL, WE WOULD BE GOING FROM 90 AND 98 UNITS TO 88 AND 96. THAT'S A PRETTY SMALL REDUCTION IN HOUSTON, BY FAR THE LARGEST REDUCTION. REGION 7, WHICH IS AUSTIN, THE AVERAGE IS 86.78, WHICH IS SAN ANTONIO, THE AVERAGE IS 84.5, BY FAR THE BIGGEST REDUCTION, AND I HAVE TO ASSUME THAT THIS IS BECAUSE THE COST OF CONSTRUCTION IN THE VALLEY IS CHEAPER THAN IT IS ELSEWHERE IN THE STATE, WOULD BE IN REGION 11, WHICH IS THE VALLEY, WHERE THE CURRENT AVERAGE IS 94. WE WOULD BE GOING 94-80. THESE OTHER ONES ARE, I DON'T WANT TO CALL THEM AN INSIGNIFICANT REDUCTION, BUT THEY'RE NOT HUGE. THAT ONE DOES STRIKE ME AS A PRETTY LARGE REDUCTION. NOW, AS TO WHY, I DON'T KNOW IF THE VALLEY HAD A SOURCE OF FUNDING, IN 2022 AND 2023 THAT ENABLED THESE HIGH UNIT COUNTS, BUT IT REALLY IS AN OUTLIER AMONG OUR REGIONS IN TERMS OF UNITS PRODUCED. [02:00:03] >> IN THE VALLEY, HISTORICALLY, IT'S BEEN MUCH CHEAPER TO BUILD WHEN ALL OF THE SUPPLY CHAIN DISRUPTIONS HAPPENED, INFLATION HAPPENED THERE TOO, AND SO THOSE PRICES HAVE COME UP SIGNIFICANTLY AS A RESULT. WHERE IN TWO YEARS AGO, IT WAS A LOT CHEAPER TO BUILD DOWN THERE, IT'S NOT NOW. >> THERE'S SOMEONE ELSE WHO WANTS TO SPEAK. I SAW ANOTHER HAND. LET'S UNDERSTAND GENERAL TOPIC. >> ROBBIE MEYER WITH ARCS ADVANTAGE. I WAS GOING TO JUST COLOR IN A PICTURE OF WHAT CODY HAS SAID AND WHAT KATHERINE HAS SAID, FROM WHAT ACTUALLY WAS SUBMITTED FOR THE APPLICATIONS THIS YEAR. IN URBAN REGIONS, OUT OF THE 28 APPLICATIONS THAT ACTUALLY CHOSE THOSE POINTS, 12 OF THOSE REQUESTS INCLUDED SOFT FUNDING, AND BETWEEN THREE MILLION AND 4.5 MILLION, F OUR OF THOSE INCLUDED HISTORIC CREDITS AS WELL. TWO OF THOSE HAD TAX EXEMPTIONS, 22 OF THOSE HAD DEBT COVERAGE RATIOS BETWEEN 1.15 AND 1.18, WHICH IS PRETTY TIGHT, 17 OF THOSE HAD INTEREST RATES BETWEEN 6.2 AND SEVEN. THE OTHERS HAD LOWER INTEREST RATES WHICH ARE GOING TO BE HARDER TO CLOSE, 20 OF THOSE HAD EQUITY PRICING BETWEEN 0.84 AND 0.89. THE OTHERS HAD HIGHER EQUITY PRICING, WHICH IS GOING TO BE MORE DIFFICULT TO CLOSE. IN THE RURAL SUB-REGIONS, THERE WERE 15 NEW CONSTRUCTION AWARDS. EIGHT OF THOSE WERE SELECTED THE LI POINTS, AND OUT OF THOSE, THOSE WERE IN LARGER RURAL CITIES SUCH AS PLAINVIEW, ATHENS, MOUNT PLEASANT, KILGORE. THEY WERE ONLY ABLE TO DO THOSE IN LARGER CITIES. YOUR SMALLER RURAL COMMUNITIES THAT ACTUALLY SUBMITTED APPLICATIONS CAN'T GET TO THOSE UNIT COUNTS. I'M FILLING IN, COLORING WHAT ACTUALLY HAPPENED THIS YEAR. LOOKING AT HOUSTON, OUT OF THE AWARDS THAT WERE MADE IN HOUSTON, FOUR OF THOSE APPLICATIONS HAD SOFT FUNDING. ONE OF THEM HAS $7.5 MILLION. THE OTHER THREE HAVE $3 MILLION IN SOFT FUNDING, JUST TO GIVE YOU AN IDEA, AND THE MAJORITY OF THOSE ARE AT A 1.6 DEBT COVERAGE RATIO. IF THEY HAVE ANY HICCUP WHATSOEVER, THEY'RE IN TROUBLE. >> DO I PUT 1.16? >> 1.16, I'M SORRY. YES. THOSE ARE VERY TIGHTLY UNDERWRITTEN DEALS. I'M SURE IF YOUR UNDERWRITING STAFF IS HERE, THEY'LL TELL YOU THAT. I TRY NOT TO PUT MY DEALS THAT TIGHT BECAUSE IF YOU HAVE ANY HICCUP AT ALL, YOU DON'T HAVE ROOM TO MESS WITH. JUST TRYING TO COLOR IN THE LINES HERE FOR YOU SO YOU CAN SEE EXACTLY WHAT WAS SUBMITTED THIS YEAR, AND WHAT WE'RE GOING TO BE UP AGAINST CARRY OVER FOR ALL OF THOSE THAT HAVE SOFT FUNDING. THEY'RE SUPPOSED TO PROVE THAT FUNDING UP, AND THAT'S NOVEMBER 1ST FOR YOU THAT DON'T KNOW WHAT WE HAVE TO TURN. DO YOU HAVE ANY QUESTIONS? >> [BACKGROUND] I THINK ONE THING TO NOTE, YOU DO WANT TO TAKE KATHERINE'S SUGGESTION ABOUT EITHER OR STATEWIDE OR REGIONAL AVERAGE. WE WOULD PROBABLY NEED TO DO THAT TODAY, BUT YOU COULD CHANGE THESE PERCENTAGES EVEN WHEN IT COMES BACK TO YOU IN NOVEMBER, IF YOU WANT TO. BEFORE YOU DO THAT? >> I DO AGREE. THE STANDARD THAT WE'RE LOOKING FOR IS, YOU CAN'T REALLY HAVE NEW CONCEPTS COME INTO A RULE FOLLOWING PUBLIC COMMENT, BUT MINOR CHANGES LIKE PERCENTAGES WOULD STILL BE ALLOWED AS A RESULT OF PUBLIC COMMENT. >> IF WE LATER ADJUST THE PERCENTAGES THAT IS A DIFFERENT WAY TO SKIN THE CAT THAT GETS YOU THERE. >> SURE. >> IF EVERYTHING THAT YOU'LL HAVE SAID, I'M STILL NOT THAT CONCERNED ABOUT THE URBAN AREAS. I'M MORE CONCERNED ABOUT THE RURAL, ESPECIALLY SMALL RURAL. >> DID YOU GET A LOT OF REHAB USDA? >> I GOT THE OTHER DIFFERENT. AT THIS POINT, IF WE LEFT IT AS IS, [02:05:04] WE DO HAVE SOME FLEXIBILITY IN THE END OF ADJUSTING IT FROM 10%, 20% DOWN TO WHETHER IT WAS SEVEN HALF 15 OR SOME OTHER FIVE AND 10. WE HAVE THAT FLEXIBILITY. >> YES, FOLLOWING PUBLIC COMMENT. >> THAT WOULD BE LESS COMPLICATED THAN THE LESS [INAUDIBLE]. COULD WE MAKE DIFFERENT PERCENTAGES FOR RURAL AND URBAN? >> I THINK THAT'S FINALLY WITHIN THIS. >> RURAL HAS IT'S OWN PART. >> [BACKGROUND] ROBBIE MEYER, WE ARE REQUESTING THAT YOU LOWER NUMBER ON RULE BECAUSE RIGHT NOW YOU'RE AT 57 UNITS AND HALF THE DEALS CAN'T GET THERE. JUST AS AN EXAMPLE, I WAS HERE BEFORE YOU ON A DEAL AND BURN IT, AND THAT WAS 36 UNITS. THAT APPLICANT, THEY ALREADY HAD THE LAND, SO WE DIDN'T HAVE LAND IN THERE AND WE DIDN'T PUT IN A COMMUNITY BUILDING BECAUSE THEY WERE SHARING NEXT DOOR, AND WE ONLY HAD 36 UNITS. THAT TELLS YOU HOW TIGHT RURAL DEALS ARE. >> WE RECOGNIZE MR. MARSHALL, DO YOU HAVE ANYTHING? >> I WAS WONDERING, HOW DOES SEEKING TAX EXEMPTION TREATMENT WHEN YOU'RE SHORT, WHEN YOU WHEN YOU NEED MORE CASH FLOW AND IT FORCES THE DEAL TO GO TO THE TAX ENTITY AND REQUEST EXEMPTION, WHICH THEN THE TAXPAYERS THAT ARE LEFT END UP PAYING FOR THE SOFT, WOULD YOU CONSIDER THAT AN INCREASE IN SOFT COSTS TO REDUCE YOUR TAX PAYMENT INSIDE THE CASH FLOW? >> SURE. KATHERINE SARATAP, QAP COMMITTEE. AGAIN, IN THAT SCENARIO, YOU WOULD GO AND SEEK A TAX EXEMPTION. LET'S SAY MY PROPERTY TAX BILL IS $100,000 A YEAR, AND I GET MY 100% TAX EXEMPTION. THAT'S $100,000 MORE IN CASH FLOW THAT I HAVE TO UPSIZE MY DEBT OR PAY MY STAFF OR PAY MY RIDICULOUS INSURANCE BILLS. THAT'S HOW THAT WOULD AFFECT THE CAPITAL TRANSACTION THAT WE'RE TALKING ABOUT BY FREEING UP CASH FLOW. >> WOULD YOU HAVE TO SHARE SOME PERCENTAGE OF THAT CASH FLOW WITH THE PFC OR HFC? >> I'M NOT AN ATTORNEY. MY UNDERSTANDING IS WHEN IN THAT SCENARIO, YOU ACTUALLY HAVE TO HAVE THE PFC OR THE HOUSING AUTHORITY BE THE MAJORITY OWNER OF THE GP INTEREST. IF YOU'RE A PRIVATE DEVELOPER AND YOU'RE HAVING TO DO THIS, YOU'RE GIVING UP THAT GP INTEREST, AND THEREFORE, YOU WOULD BE GIVING UP WHATEVER PERCENTAGE OF THE CASH FLOW THAT YOU WERE ANTICIPATING. YES. >> I GUESS MY QUESTION IS ANYTHING IN THESE FORMULAS IN THESE RURALS ENCOURAGING THIS ACTIVITY OF SEEKING THE TAX EXEMPTION AND TAKING IT OFF TAX RULES. I DON'T THINK WE SHOULD SING POLICY HERE PASSING RULES THAT ENCOURAGE THAT. MY QUESTION IS [INAUDIBLE] >> SURE. THERE IS NOT A DIRECT INCENTIVE IN THE QAP TO SEEK A TAX EXEMPTION. HOWEVER, I DO THINK THAT THERE'S MERIT TO WHAT MASSAR IS SAYING THAT THE ECONOMIC REALITIES OF HAVING TO PRODUCE THIS NUMBER OF UNITS SOMETIMES PUTS DEVELOPERS IN SITUATION WHERE THAT IS THEIR BEST OPTION. INDIRECTLY, SURE, BUT NOT DIRECTLY. >> I BELIEVE THE BOARD CONSENSUS IS TO LEAVE IT AS IS AND WE'LL DISCUSS THE POTENTIAL ADJUSTMENT OF THE PERCENTAGES, WHICH WOULD IN TURN GET US TO THAT SAME. DOES AUDREY HAVE ONE MORE THING TO SAY ON THIS TOPIC? >> YES, SIR. AUDREY MARTIN, PURPLE MARTIN REAL ESTATE AND ALSO ON THE TAP QAP COMMITTEE. I DID JUST WANT TO MENTION ON THE PERCENTAGES AND ADJUSTING THEM LATER. IT IS A LITTLE BIT HELPFUL, OF COURSE, FOR US TO GET INFORMATION ON THE EARLIER END ABOUT WHETHER THOSE PERCENTAGES MAY BE ADJUSTED DOWNWARD. THAT IS SPECIFICALLY BECAUSE WE'RE LOOKING FOR DEVELOPMENT SITES STARTING NOW AND SO WHEN WE'RE LOOKING FOR LAND, [02:10:01] WE'RE RUNNING OUR PRELIMINARY FINANCIAL MODELS TO SEE, CAN WE REALLY FIT THIS NUMBER OF UNITS THAT WE'RE GOING TO NEED TO PUT ON THAT SITE TO BE COMPETITIVE UNDER THIS SCORING ITEM? CAN WE FIT THEM? WE MAY RULE OUT SITES THAT PERHAPS WILL WORK IF YOU DO ULTIMATELY BRING THOSE PERCENTAGES DOWN A LITTLE BIT TO PROVIDE RELIEF WHEN WE'RE AT THE NOVEMBER BOARD MEETING. ANYWAY, JUST FOOD FOR THOUGHT IT'S HELPFUL FOR US TO KEEP SITE OPTIONS OPEN FOR PURSUIT IF WE KNOW THAT THE NUMBERS MAY COME DOWN A LITTLE BIT. THEN I JUST WANTED TO SUPPORT ALL THE COMMENTS THAT ROBBIE AND KATHERINE MADE AND JUST SAY THAT I THINK THIS SCORING ITEM HAS A LAUDABLE GOAL TO PRODUCE MORE UNITS. MY CONCERN AND WHAT I COMMUNICATED IN MY PUBLIC COMMENT IS JUST THAT WE DON'T KNOW HOW IT'S GOING TO FALL OUT JUST YET. BUT WE DO SEE SOME INDICATORS THAT WE'RE GOING TO HAVE A LITTLE MORE TROUBLE, AS PEOPLE HAVE SAID, WITH FEWER SOFT FUNDS AVAILABLE, AND WE ONLY HAVE SO MANY LEVERS TO PULL LIKE SEEKING TAX ABATEMENTS. WE HAVE TO GET SOFT FUNDS OR WE HAVE TO SEE TAX ABATEMENTS. THERE ARE ONLY SO MANY THINGS WE CAN DO FINANCIALLY. IT MAY BE PRUDENT TO MAYBE JUST PULL BACK ON THOSE PRODUCTION EXPECTATIONS WHILE WE SEE WHAT'S GOING TO HAPPEN IN 2024. BECAUSE WHILE WE CAN, WE MAY BE FORCED TO RETURN CREDITS FOR SOME DEALS THAT ARE NOT FEASIBLE UNDER THE '24 POLICY. TDHCA WILL GET THOSE CREDITS BACK, BUT YOU'RE GOING TO DELAY THE PRODUCTION OF THOSE UNITS BY A YEAR. WELL, POTENTIALLY, I GUESS, IF YOU CAN GIVE THEM TO THE NEXT DEAL IN LINE, MAYBE NOT. BUT THERE'S THE POTENTIAL THAT THERE'S A DELAY IN THE PRODUCTION OF THOSE UNITS, IF WE'RE GETTING TOO AGGRESSIVE ON OUR GOALS. ANYWAY. >> THANKS, AUDREY. CODY, CAN WE START? >> WE CERTAINLY MAY. I THINK THE NEXT TOPIC THAT'S GOING TO GET A LOT OF COMMENT IS THE QUALIFICATIONS FOR THE AT RISK SET ASIDE. AGAIN, JUST AS A BRIEF REMINDER, 15% OF OUR STATE CREDIT CEILING EVERY YEAR IS RESERVED FOR DEVELOPMENTS THAT ARE AT RISK OF LOSING AFFORDABILITY. THE QUALIFYING SUBSIDIES ARE VERY CLEARLY DEFINED IN STATUTES. IT'S QUITE A LONG SECTION OF STATUTE. THE FIRST 5% OF OUR CEILING THAT COMES OUT OF THAT 15% HAS TO GO TO DEVELOPMENTS THAT ARE ASSISTED BY USDA, THAT'S THE USDA SET ASIDE. IT IS POSSIBLE FOR A USDA DEVELOPMENT TO BE BOTH ELIGIBLE FOR THE USDA AND AT RISK SET ASIDES. WHAT WE SAW THIS YEAR AND WHAT WE'VE SEEN RECENTLY IS THAT USDA DEVELOPMENTS TAKE UP WHAT SOME MIGHT CONSIDER TO BE A DISPROPORTIONATE AMOUNT OF THE AT RISK SET ASIDE BETWEEN THE USDA SET ASIDE AND THOSE THAT QUALIFY FOR THE AT RISK. WE PROPOSED A COUPLE OF CHANGES TO THE QAP TO TRY AND REBALANCE THAT. WE HAVE NOT GOTTEN GREAT FEEDBACK ON THOSE CHANGES, AND STAFF IS CURRENTLY OF THE BELIEF THAT WE MIGHT HAVE MISSED THE MARK ON THIS ONE. I KNOW THAT WE HAVE SEVERAL PEOPLE WHO WOULD LIKE TO MAKE COMMENTS ON THAT, THOUGH, AND THEY WILL PROBABLY HAVE OTHER THINGS TO SAY ABOUT THAT. >> IF I COULD JUST ADD CLARIFICATION, AT THE BEGINNING OF YOUR PRESENTATION, YOU WERE SUGGESTING THAT POSSIBLY TO REFER TO THE LANGUAGE AS IT EXISTED IN THIS OCCURRING HERE. >> SURE. >> WHICH COMES WITH ITS OWN ISSUES THAT WERE ALREADY PRESENTED TO THE BOARD. PERHAPS THAT COULD FRAME THE COMMENT. >> SURE. THANK YOU. >> WHO WANTS TO GO FIRST? >> ROBBIE MEYER, AND NOW I'M SPEAKING AS THE PRESIDENT OF RURAL RENTAL HOUSING. I'M GOING TO ADD A LITTLE BIT OF COLOR TO THAT AS WELL. I WILL BE SPEAKING TO PAGES 43 AND 44 OF 221 IN THE QAP THAT'S LISTED IN YOUR BOARD BOOK, IF YOU WANT TO SEE WHERE I'M TALKING. THERE ARE TWO CHANGES THAT MR. CAMPBELL HAS EXPRESSED, AND THEY ARE TO THE AT RISK SET ASIDE. ONE OF THESE COMPLETELY ELIMINATES USDA FINANCE DEVELOPMENTS FROM COMPETING IN THE AT RISK SET ASIDE, AND IT'S ACTUALLY THE FIRST CHANGE. I'M TALKING ABOUT COMPETING, NOT IN THERE, BUT COMPETING. THE AT RISK HAS BEEN DEFINED IN STATUTES SINCE 2001 AND USDA FINANCED DEVELOPMENTS HAVE BEEN INCLUDED IN THAT DEFINITION SINCE 2001. THE LEGISLATURES SPECIFICALLY INCLUDED USDA FINANCED DEVELOPMENTS BY LISTING THE PROGRAMS AND THE SUBSIDIES THAT ACCOMPANY THOSE PROGRAMS. IN 2007, THE AT RISK AND USDA WERE SEPARATED. THEY WERE AWARDED OUT OF EACH SUB REGION. BUT IN 2007, THE LEGISLATURE CHANGED THAT AND REMOVED [02:15:02] THE 15% AS A WHOLE AND PUT IT AS ITS OWN SET ASIDE, USDA REMAINING IN THAT AT RISK DEFINITION. AFTER 20 YEARS OR MORE THAN 20 YEARS, WE'RE NOW RECOMMENDING CHANGES TO SOMETHING THAT HAS BEEN DEFINED SPECIFICALLY AND EMBEDDED IN STATUTE SINCE 2001. I'M NOT REALLY HERE TO ARGUE RIGHT OR WRONG. WHAT I'M HERE TO ARGUE IS THIS IS SOMETHING THAT IS IN STATUTE, AND WE WOULD LIKE THE OPPORTUNITY TO FIX THAT LEGISLATIVELY INSTEAD OF TRYING TO REWORK THE RULES TO WORK AROUND WHAT IS ALREADY IN STATUTE. THAT'S REALLY WHAT I'M REQUESTING TO FOLLOW WHAT CODY HAS SAID IS, LEAVE IT ALONE FOR RIGHT NOW, OUR LEGISLATIVE SESSION IS COMING UP AND ALLOW US TO WORK WITH THE LEGISLATURE TO CLARIFY WHAT IS SUPPOSED TO BE DONE AND HOW IT'S SUPPOSED TO BE DONE. THANK YOU. >> TRACY FINE, NATIONAL CHURCH RESIDENCES. A LITTLE BIT OF COLOR AND HISTORICALLY, WE HAVE TOTALLY FLAT SCORING AND RURAL DEALS HAVE THE ADVANTAGE ON THE TIE BREAK. THEY HAVE LESS DISTANCE TO AMENITIES, THEY HAVE LESS DISTANCE TO THE NEXT DEAL. THESE ARE ALL THE TIE-BREAKERS, AND SO HISTORICALLY, THEY ARE WINNING THE TIE BREAKS, WHICH IS THIS PAST ROUND THEY ATE UP SO MUCH OF THE BUCKET. SECTION 2306804, USE OF HOUSING PRESERVATION RESOURCES. TO THE EXTENT POSSIBLE THE DEPARTMENT SHALL ALLOCATE LOW INCOME HOUSING TAX CREDITS TO APPLICATIONS INVOLVING THE PRESERVATION OF DEVELOPMENTS ASSIGNED CLASS A, WHICH IS SUBSIDIZED PROPERTIES IN BOTH URBAN AND RURAL COMMUNITIES IN APPROXIMATE PROPORTION TO THE HOUSING NEEDS OF EACH UNIFORM STATE SERVICE REGION. YOU JUST HEARD USDA SWAPPED 50% OF THE FUNDS LAST ROUND. OVER THE LAST FIVE YEARS, RURAL DEALS TOOK 44%. TO NOTE THE RURAL TAX POPULATION IS 16% OF THE STATE, 56% OF THE AT RISK FUNDS WENT TO URBAN, REPRESENTING 84% OF THE STATE'S POPULATION. THIS IS A GROSS INEQUALITY OF HOUSING NEEDS BEING SERVED. OF THE FIVE MAJOR METRO AREAS IN TEXAS, DALLAS FORT WORTH, HOUSTON, SAN ANTONIO, AUSTIN, ONLY ONE OF THESE SUB-REGIONS GOT AN AWARD, WHICH WAS SIAN MARCUS ONE HOUR SOUTH OF AUSTIN. THESE FIVE AREAS REPRESENT ABOUT 70% OF THE POPULATION, YET WE ARE NOT FUNDING ANY PRESERVATION OR VIRTUALLY NO PRESERVATION IN THESE AREAS. PER THE RAF, A CALCULATION DETERMINED BY THE DEPARTMENT WHICH REPRESENTS HOUSING NEEDS OF EACH SERVICE REGION, 62% OF THE FUNDS SHOULD BE GOING TO THESE SUB-REGIONS. LAST YEAR, IT WAS 19% AND LAST FIVE YEARS, IT WAS 47%. THIS IS WOEFULLY SHORT OF THE HOUSING NEEDS DETERMINED BY THE DEPARTMENT. ALSO IN THE PAST FIVE YEARS, REGION 11 PRIMARILY BROWNSVILLE RECEIVED 30% OF THE AT RISK BUCKET. THE RAF SHOWS THEIR HOUSING NEEDS AT ONLY 9% AND 24 ALONE, REGION 11 TOOK OVER 81% OF THE URBAN AT RISK FUNDS. WELL, SOME OF THE PROPOSED TWEAKS, PARTICULARLY THE TWEAK THAT WOULD ONLY ALLOW THE USDA TO TAKE A SECOND BITE AT THE APPLE AFTER THE AT RISK, OTHER AT RISK DEALS HAVE HAD A CHANCE TO BE FUNDED WOULD HELP SOLVE THE PROBLEM, BUT THERE ARE TWO ITEMS IN THE QAP WILL ACTUALLY MAKE IT WORSE. REGION 11 BROWNSVILLE HAS SWEPT THE POT PRIMARILY BECAUSE THEY DEMOLISHED THEIR PROPERTIES AND MOVE THEM TO A NEW LOCATION. 2306804 HOUSING PRESERVATION RESOURCES. TO THE EXTENT POSSIBLE, THE DEPARTMENT SHALL USE AVAILABLE RESOURCES FOR THE PRESERVATION AND REHABILITATION. THIS IS AN AND STATEMENT, NOT AN OR STATEMENT. THE ADDITION OF AN EXTRA POINT FOR UNDERSERVED UNDER THE FIRST INCOME CENSUS TRACT ONLY PUSHES THESE REGION 11 APPLICATIONS TO THE TOP. IT WON'T EVEN COME DOWN TO TIE BREAKERS ANYMORE. WE DON'T HAVE A CHANCE TO EVEN OUT THE QUALITY. THE SOLUTION IS TO NOT ALLOW THIS NEW POINT TO BE AVAILABLE FOR APPLICATIONS IN THE AT RISK SET ASIDE. I ALSO PROVIDED SOME OTHER IDEAS THAT WOULD MAKE EVENING OUT THIS A LITTLE BIT BETTER. I THINK FOR ME, THE BEST IDEA IS TO ADD A DIFFERENT TIE-BREAKER TO AT RISK, WHICH WOULD BE THE JOBS POINTS. IF WE HAD THE JOBS POINTS AS THE FIRST TIE-BREAKER, I REALLY THINK THAT IT WOULD EVEN IT OUT AND IT WOULD LEVEL OUT THE PLAYING FIELD SO THAT THE RURAL DEALS DON'T ALWAYS HAVE THE ADVANTAGE, [02:20:05] WHICH IS WHAT HAS BEEN HAPPENING IN THE LAST FIVE YEARS. YOU GUYS HAVE TO PUT SOME GUARD RAILS. >> THANK YOU, TRACY. [INAUDIBLE] SOME OF THIS STATUTORY LEGISLATIVE VERSUS RULES SOMETHING THAT ENFORCES SINCE THEN? >> THE DEFINITION OF AT RISK IS STATUTORY. THE THE GENERAL GOAL THAT MS. FINE READ THAT WE DISTRIBUTE OUR PRESERVATION DOLLARS THROUGHOUT THE STATE IS ALSO IN STATUTE. THERE'S BEEN A LOT OF STATUTES CITED IN THE LAST COUPLE OF COMMENTS. THE CHANGES THAT ARE PROPOSED ARE, OF COURSE, RULE CHANGES. >> THE USDA HAVING TO WAIT THE SECOND OUTLET HELPS THE URBAN AT RISK. WHAT IS THIS POINT OR THE OTHER POINTS SHE WAS MAKING ABOUT? >> THE UNDERSERVED AREA SCORING CATEGORY IS A PRETTY SIGNIFICANT SCORING CATEGORY IN THE QAP. IT IS ONE THAT IS REQUIRED BY STATE STATUTE. WE'RE REQUIRED TO GIVE POINT INCENTIVES BASED ON THE UNDERSERVED NATURE OF THE CENSUS TRACT. WE HAVE MADE JUST A COUPLE OF TWEAKS TO IT THIS YEAR THAT WILL ALLOW MORE REAL ESTATE TO BE COMPETITIVE. ONE OF THE OPTIONS THAT WE ADDED IS A FIVE POINT OPTION FOR DEVELOPMENTS THAT ARE LOCATED IN FIRST INCOME QUARTILE CENSUS TRACTS. YOUR VERY HIGH INCOME CENSUS TRACTS WOULD SCORE UNDER THE UNDERSERVED AREA SCORING CATEGORY. THE RATIONALE BEING THAT THE VERY HIGH INCOME CENSUS TRACTS ARE GENERALLY UNDERSERVED BY OUR PROPERTIES. MS. FINE'S POINT IS THAT SOME HOUSING AUTHORITIES IN ORDER TO COMPETE IN AT RISK, DEMOLISH AND RECONSTRUCT PROPERTIES, AND SO LONG AS THEY CARRY THE SUBSIDY WITH THEM THAT IS ELIGIBLE FOR AT RISK, HER POINT IS THAT THESE HOUSING AUTHORITIES WILL NOW HAVE THE OPTION TO RELOCATE, EXCUSE ME, THEIR DEVELOPMENTS INTO HIGH INCOME AREAS, THUS SCORING THE UNDERSERVED AREA POINTS, THE MAXIMUM, AND THUS GIVING THEM AN ADVANTAGE IN THE AT RISK SET ASIDE. I BELIEVE TRACY? >> NO, THAT'S CORRECT. PARTICULARLY THE REGION THAT'S BEEN OVERFUNDED CONSISTENTLY USES THAT TANGENT. >> SURE. >> CATHERINE SARR, SPEAKING ON BEHALF OF BROWNSTONE. I'M SORRY. >> THAT'S ALL RIGHT. >> I WOULD LIKE TO POINT OUT THAT THE CONSTRUCT THAT CODY JUST MENTIONED HAS BEEN IN THE RULE FOR A VERY LONG TIME, AND DEMOLISHING OLD PUBLIC HOUSING THAT HAS LONG EXCEEDED ITS USEFUL LIFE AND MOVING IT TO HIGH INCOME AREAS IS NOT A BAD THING. >> PLEASE, INTRODUCE YOURSELF. >> MR. CHAIRMAN, MEMBERS OF THE BOARD, I'M TODD CURT WITH CURT AND ASSOCIATES, REPRESENTING TODAY RURAL RENTAL HOUSING AND THE TEXAS ASSOCIATION OF LOCAL HOUSING FINANCE AGENCIES. I'LL BE BRIEF. I'M NOT AN EXPERT IN WHETHER THESE ARE GOOD OR BAD OR WHAT SUGGESTIONS. I THINK SOME POINTS HAVE BEEN BROUGHT OUT WHERE CLARIFICATION NEEDS TO BE MADE. I REALLY REPRESENT THE SIDE OF THIS STUFF HAS BEEN DETERMINED THROUGH STATUTE, AND I WOULD PREFER THAT WE'RE GIVEN THE OPPORTUNITY TO SOLVE THIS STATUTORILY BEFORE WE GO DOWN THE RULE. NOW, BASED ON WHAT CODY HAS SAID AND THE HARD WORK THEY'VE DONE, I THINK THEY'RE SAYING, MAYBE WE DIDN'T MISS THE MARK. HAVING REPRESENTED HOUSING FOR MANY YEARS, I WANT TO COMPLIMENT DIRECTOR WILKINSON, CODY AND YOUR TEAM. THEY SEEM TO GET TO THE RIGHT PLACE, AND OUR REQUEST IS JUST SIMPLY GIVE US A CHANCE TO WORK WITH THE AGENCY THROUGH THE PROCESS WHICH JANUARY 14TH, WILL BE HERE BEFORE WE KNOW IT, AND THE PARTY STARTS AGAIN, AND WE CAN TRY TO WORK THIS OUT STATUTORILY SO WE DON'T HAVE A RULE DICTATING STATUTE. MR. CHAIRMAN, THAT'S ALL I HAVE. I'LL STAND FOR ANY QUESTIONS, IF NECESSARY. >> OKAY. >> THANK YOU, SIR. >> THANKS, TODD. IF YOU GOT THE SAME GENERAL TOPIC GO AHEAD. COME ON, GO AHEAD. >> I GUESS IT'S AFTERNOON. GOOD AFTERNOON, BOARD, CHAIR, STAFF. MY NAME IS JUSTIN MEYER, AND I'M THE CHAIR OF THE QAP DEVELOPMENT COMMITTEE WITH RURAL RENTAL HOUSING, AND I'M ALSO REPRESENTING RCS ADVANTAGE. IF YOU'D ALLOW ME TO SPEAK JUST FOR A MOMENT, THE CHANGE TO USDA IN THE AT RISK SET ASIDE FOUND ON PAGE 43 OF YOUR QAP I FEEL IT BECOMES IMMEDIATELY PERTINENT TO ESTABLISH THAT ALL USDA DEVELOPMENTS ARE BY DEFAULT, CONSIDERED AT RISK DEVELOPMENTS. USDA HAS ALWAYS BEEN A PRIORITY WITHIN THE AT RISK SET ASIDE SINCE ITS EARLY BEGINNINGS IN 2001, WHICH IS FURTHER ILLUSTRATED IN THE 2007 STATUTE WHEN AT [02:25:04] RISK BECAME STATE WIDE AS OPPOSED TO BEING REGIONALLY ALLOCATED. AND USDA ONCE AGAIN, HAVING AN ESTABLISHED PRIORITY WITHIN THE AT RISK POOL. IF A DEVELOPMENT QUALIFIES AS USDA, IT IS DE FACTO ESTABLISH THAT IS ALSO INCLUDED IN THE AT RISK SET ASIDE. 1486 IS THE SUBSIDY PORTION OF USDA DEVELOPMENTS, AND THEY'RE LISTED SPECIFICALLY AS A BOTH A QUALIFYING FUNDING SOURCE FOR USDA, AS WELL AS A QUALIFYING FUNDING SOURCE FOR AT RISK. THAT'S IN THE QAP AS IT'S WRITTEN, HAS BEEN WRITTEN, IS CURRENTLY WRITTEN. THAT WOULD BE A VERY SIGNIFICANT CHANGE. AGAIN, WE DO ASK THAT WE GET THE OPPORTUNITY TO DO SOMETHING FROM THE LEGISLATIVE INTENT AS WE ARE CONTINUING TO ESTABLISH THAT IT'S A STATUTE AFTER STATUTE AFTER STATUTE. WITH RESPECT TO MS. FINE'S COMMENTS, IN 2001, AT RISK WAS REGIONALLY ALLOCATED AND THAT WOULD HAVE GIVEN DIFFERENT OPPORTUNITIES FOR MORE URBAN AREAS. BUT RESPECTFULLY IN 2007, THAT STATUTE WAS CHANGED, AND NOW WE ARE LOOKING STATEWIDE, AND THAT IS THE CURRENT STATUTORY NATURE OF AT RISK AND USDA. THANK YOU FOR THE OPPORTUNITY. >> THANKS, JUSTIN. I GUESS, EVERYONE RECOGNIZES WE ARE TRYING TO FIGURE OUT THE BALANCING ACT BETWEEN THE LARGER NUMBER NEEDS IN URBAN AREAS. BUT AGAIN, WE REPRESENT THE ENTIRE STATE, AND WE GOT TO MAKE SURE WE CARRY ALONG THE RURAL AREAS AS WELL. IT SOUNDS LIKE WE'RE ALREADY MAKING AT LEAST A SMALL STEP IN THE DIRECTION WITH THAT DELAYED SECOND BITE TOO. >> HELP MAKE IT A LITTLE MORE EQUITABLE FOR URBAN AREA WITHOUT ABANDONING THE RULE. YOU HAVE ONE MORE TIME ON THIS MR. SMITH. >> TIM SMITH WITH HOK DEVELOPMENT SERVICES. I AGREE WITH A LOT OF THE COMMENTS ALREADY SAID REGARDING URBAN AND RURAL. TWO THINGS, I WILL SAY, I AGREE WITH CODY THAT SOME OF THE LANGUAGE CAUSES SOME PROBLEMS. NOT EVEN AT RISK FOR USDA JUST GETTING CONFIRMATION FROM OTHER FEDERAL AGENCIES. THAT'S GOING TO BE AN ISSUE. THE SECOND THING, JUST FOR THE URBAN VERSUS RURAL, I DO A LOT OF 4% DEALS THAT WOULD QUALIFY AS AT-RISK IN URBAN AREAS. THEY JUST WORK REALLY WELL, THEY HAVE THE HIGHER RENTS, THEY HAVE THE HIGHER PAYMENT STANDARDS, WHERE RURAL DEALS DON'T REALLY HAVE THE OPTION TO WORK AS 4% DEALS. THE 9% IS REALLY THE ONLY WAY. I'VE DONE MANY SECTION 8 DEALS UNDER THE 4% PROGRAM OVER THE LAST 5-6 YEARS. >> TRACY, PLEASE. >> TRACY FINANCIAL RESIDENCES, JUST TO BE CLEAR, ONE-THIRD OF THE ENTIRE AT-RISK BUCKET WILL STILL GO TO USDA, CORRECT? >> IT HAS TO. >> YES. IT HAS TO. WE'RE JUST TALKING ABOUT NOT OVEREATING INTO THAT BUCKET. I WISH MY URBAN DEALS WITH 4%. I REALLY DO, BUT THEY DON'T ALWAYS DO. >> YOU CAN SEE WHY STAFF MIGHT BE EAGER TO PUMP THE BRAKES ON SOME LANGUAGE CHANGES BECAUSE THERE IS A GREAT DEAL OF DISAGREEMENT WITHIN THIS PARTICULAR COHORT OF DEVELOPERS ABOUT WHAT SHOULD BE DONE AND WHETHER THE LANGUAGE THAT WE'VE PROPOSED SOLVES ANYTHING. THE EXISTING LANGUAGE THAT WE HAVE IN THE QAP HAS BEEN IN THERE FOR YEARS, ALMOST ENTIRELY UNCHANGED. THERE HAVE BEEN SLIGHT TWEAKS, BUT IT HAS BEEN IN THERE ALMOST ENTIRELY UNCHANGED FOR YEARS. IT IS OBVIOUSLY NOT PERFECT, AS MS. FINE HAS POINTED OUT. THERE ARE SOME IMBALANCES BETWEEN URBAN AND RURAL, BUT IT IS A KNOWN QUANTITY. WE KNOW HOW TO EFFECTUATE THOSE RULES. AGAIN, I AM NOT SURE THAT WE HIT THE MARK WITH THE LANGUAGE THAT WE HAVE SUGGESTED IN THE QAP. >> FOR NOW THAT IS? >> THAT WOULD BE MY RECOMMENDATION. >> YOU RECOMMENDED TO REFER TO 2024 AND NOT HAVING CERTAIN LANGUAGE? >> CORRECT. THAT'S ON PAGE 43. >> A VIOLATION YET? [02:30:02] >> IT IS NOT A VIOLATION YET. IT'S BOTH CONTENTION ON THAT, YES. >> PAGE 43 AND 44 [INAUDIBLE]. [OVERLAPPING] AFTER ADDING NEW LANGUAGE. >> PLEASE SAY ONE MORE THING. IF YOU REVERT BACK, HOW WILL YOU OTHERWISE EVEN OUT THE AWARDS TO BE MORE EQUAL IF YOU KEEP SCORING AND TYPE BREAKERS EXACTLY THE SAME, WHICH REWARDS RULE DEALS. IS THERE A WAY? THERE ARE OTHER WAYS TO SOLVE THIS PROBLEM THAN THIS LANGUAGE. THE OTHER WAYS ARE CHANGING THE TYPE BREAK AND CHANGING OTHER SCORING OPTIONS TO FAVOR OTHER LOCATIONS. IF YOU DON'T DO THIS, PLEASE CONSIDER THE OTHER ONES. >> AT RISK IS IN STATUTE AS A STATEWIDE COMPETITION. WE DO HAVE A VERY GENERAL DIRECTIVE TO TRY AND BALANCE THOSE OUT. BUT FOR EXAMPLE, MS. FINE HAS BROUGHT UP THE RAF, THE REGIONAL ALLOCATION FORMULA, AND THIS PART IS SUPPOSED TO GET 9% AND THIS PART IS SUPPOSED TO GET 11%. THE AT-RISK SET ASIDE IS SPECIFICALLY EXCLUDED FROM THAT. IT IS A STATEWIDE BUCKET OF MONEY THAT PEOPLE ACROSS THE STATE COMPETE FOR. IT IS NOT POSSIBLE WITHIN THAT STATUTORY FRAMEWORK TO FIGURE OUT SOME RAF PROCESS TO DISTRIBUTE THOSE FUNDS BECAUSE THEY'RE JUST NOT SET UP THAT WAY IN STATUTE. >> CAN THIS GET CLARIFIED BUT STATUTORY CHANGES OUTSIDE OF THESE RULES? >> CERTAINLY. YES. >> NOW, I'M NOT SURE WHAT STATUTORY CHANGES ARE GOOD DEVELOPERS HERE, TRACY AND ROBBIE ARE PLANNING ON ADVOCATING FOR. >> CONFIRM WITH DEPARTMENT JUST TO MAKE SURE THERE'S REPERCUSSIONS CHANGE. >> THE EFFECT TO APPLICATIONS [INAUDIBLE] ON MARCH 1ST. >> THE ISSUES. >> OFFICIAL. >> SURE. >> GREAT. THANK YOU. THAT'S IT FOR THE TOPICS, TRULY THAT I EXPECT A LOT OF VARIED COMMENT ON. I KNOW THAT THERE ARE SPECIFIC TOPICS THAT A FEW OF THESE FOLKS WANT TO SPEAK ABOUT, BUT THEY'RE INDIVIDUALS. I WOULD SUGGEST THAT AT THIS POINT WE CAN MOVE ON TO JUST GENERAL COMMENTS. >> JOY DO YOU HAVE [INAUDIBLE]? >> JOY HOROCK BROWN, PRESIDENT AND CEO OF NEW HOPE HOUSING IN HOUSTON, TEXAS. AS MANY OF YOU MAY BE AWARE, THE VAST MAJORITY OF OUR PORTFOLIO IS SUPPORTIVE HOUSING, AND TO PUT A NUMBER TO THAT, IT WOULD BE 1,288 APARTMENT HOMES THAT SERVE THE FORMERLY HOMELESS, INCLUDING CHRONIC OR STREET HOMELESS AND THOSE AT SEVERE RISK. INDEED, 700 OF OUR APARTMENT HOMES ARE SPECIFICALLY FOR THE CHRONIC HOMELESS. I VERY MUCH APPRECIATE CODY MENTIONING NEW HOPE HOUSING AND FOUNDATION COMMUNITIES IN THE SMALL ALTERATIONS THAT HE SUGGESTED EARLIER. I'M HERE WITH ONE OTHER THING, AND I DID DISCUSS THIS WITH WALTER THIS MORNING. THAT IS THAT ON PAGE 49 OF YOUR DRAFT, IT STATES THAT IN URBAN AND RURAL SUB-REGIONS, NOT INCLUDING THE NOW FAMOUS AT-RISK SET ASIDE, THAT NO MORE THAN ONE APPLICATION WITH A SUPPORTIVE HOUSING TARGET POPULATION WILL BE AWARDED. I CAN SEE THE NEED FOR THAT, AND I SUPPORT THAT WITH THIS ONE CAVEAT. I SUPPORT THAT BECAUSE IN MANY REGIONS, THERE ARE SO FEW APPLICATIONS AWARDED, THAT YOU JUST CAN'T HAVE SUPPORTIVE HOUSING SUCKING ALL OF THEM UP. HOUSING IS NEEDED FOR A BROAD RANGE. [02:35:02] WHAT I'M SUGGESTING IS THAT WE EXEMPT REGION 6, WHICH IS THE HOUSTON HARRIS COUNTY REGION, AND POSSIBLY REGION 3, WHICH IS THE METROPLEX. I CAN FOR SURE, ADDRESS REGION 6 WITH QUITE A GOOD BIT OF EXPERIENCE THERE SINCE 2008, INDEED, AND WE ARE DOWN 60% IN HOMELESSNESS IN THE TIME I HAVE BEEN DOING THIS WORK. THERE ARE A FEW MORE THAN 3,000 PEOPLE ON THE STREET IN HOUSTON. HOWEVER, THE COALITION FOR THE HOMELESS HAS IDENTIFIED 5,200 PEOPLE CURRENTLY HOUSED. THEY ARE VERY CONCERNED ARE GOING TO FALL BACK INTO HOMELESSNESS. THEY ARE INCIPIENT HOMELESS. THE KINDER INSTITUTE AT RICE UNIVERSITY, THEIR 2024 HOUSING POLICY REVIEW DID STATE THAT THE GREATEST NEED IS FOR THOSE AT 50% AND BELOW, BUT REALLY 30% AND BELOW IS THE EVEN STRONGEST NEED WHERE TEXAS IS 46 OUT OF 51 STATES IN SERVING THAT POPULATION. FOR MANY OTHER REASONS, FOR EXAMPLE, THE KINDER INSTITUTE, ONE OF THE QUESTIONS THEY ASK EVERY YEAR IS IF YOU HAD TO COME WITH $400 FOR AN EMERGENCY, COULD YOU? AND 50% OF THE PEOPLE RANDOMLY SURVEYED SAID THEY COULD NOT. GIVEN THE LARGER POPULATION IN REGION 6, AND I WOULD SUGGEST ALSO REGION 3, I DON'T THINK IT MAKES SENSE TO LIMIT TO JUST ONE TRANSACTION, SUPPORTIVE HOUSING IF THERE IS MORE THAN ONE VIABLE TRANSACTION. >> HAS THERE BEEN A DISCUSSION BEFORE? [INAUDIBLE] >> SURE. SORRY, I CAN'T TELL FROM MY END. I FIND IT TO BE A REASONABLE SUGGESTION, AND IF THE BOARD AGREES WITH JOY, WE CAN CERTAINLY ADD THAT LANGUAGE INTO THE QAP. >> YOU MIGHT WANT TO DO THAT BY POPULATION RATHER THAN JOY PICKING REGIONS. [LAUGHTER]. >> THE THRESHOLD COUNTY OF THAT. >> SURE. WE WOULD HAVE TO LOOK AT THE POPULATIONS OF THE COUNTIES AND THE PLACES ACROSS TEXAS TO DETERMINE WHERE TO SET THAT THRESHOLD SO THAT WE ONLY CATCH THREE AND SIX. THE PROBLEM WITH EVEN THE SMALLER URBAN SUB-REGIONS, SUCH AS AUSTIN, WHICH TYPICALLY GETS ABOUT THREE AWARDS IS THAT MORE THAN ONE SUPPORTIVE HOUSING AWARD, AS JOY MENTIONED, TAKES UP A LOT OF OXYGEN IN THE ROOM. WE WOULD NOT HAVE THAT PROBLEM IN THREE AND SIX, WHERE SIX AND SEVEN AWARDS IS NOT UNHEARD OF AND AROUND. >> IF WE SET A CERTAIN LEVEL BUT JUST ENCOMPASS THREE AND SIX. >> SURE. >> WE CAN ALWAYS READJUST THAT NUMBER, ADDING IN THAT NEXT SIZE REGIME. THAT'S SOMETHING WE CAN INCORPORATE [OVERLAPPING] I DON'T HAVE ANY PROBLEMS ON WHO WANT TO SPEAK AGAINST THAT CONCEPT. >> DONNA RICK AND BAER WITH EMRECK. JOY OR BROWN DOES TREMENDOUS WORK ON THE SUPPORTIVE HOUSING FRONT. VERY GREAT QUALITY WORK. I RESPECT EVERYTHING THAT SHE DOES IN HOUSTON ON THAT LEVEL. I DO THINK THE CHANGE THAT'S IN THE RULES THAT LIMITS IT TO NO MORE THAN ONE IS A GREAT RULE CHANGE. YES, REGION 6 CAN HAVE, 4-6 DEALS YEARLY, BUT DO KEEP IN MIND, YOU STILL NEED FAMILY DEVELOPMENTS. YOU STILL NEED SENIOR DEVELOPMENTS. AGAIN, YOU TAKE THEM OUT AND YOU ADD MORE SUPPORTIVE HOUSING. YOU'RE STILL LIMITING THE OTHER HOUSING TYPES THAT ARE AVAILABLE. THAT'S THE SAME EXAMPLE IN REGION 3. I REALLY HOPE THAT WE CAN KEEP THAT LIMITATION IN PLACE BECAUSE IF YOU START ADDING OR SUBTRACTING REGIONS, THEN THE DOMINO EFFECT OF THAT IS THEN YOU'RE GOING TO END UP WITH REGION OF SAN ANTONIO AND SOME OF THESE OTHER MARKET AREAS. THE FAIRNESS OF THIS CHANGE, I THINK IS TO KEEP IT AS IS. THANK YOU VERY MUCH. >> BUT JUST FOR SUPPORTIVE HOUSING IS NOT LIMITED TO NON-FAMILY. >> THAT'S EXACTLY WHAT I WAS GOING TO SAY. [LAUGHTER] >> GO AHEAD EXCUSE ME. >> TO PUT NUMBERS TO IT AGAIN, [02:40:01] WE HAVE 287 APARTMENT HOMES FOR FORMERLY HOMELESS AND AT RISK FAMILIES THAT ARE SUPPORTIVE HOUSING AND WE HAVE ADDITIONAL UNITS IN THAT APARTMENT HOMES IN THAT STRATA THAT ARE UNDER DEVELOPMENT TODAY. MANY OF THE PEOPLE WHO LIVE IN OUR BUILDINGS ARE SENIORS, A VERY HIGH PERCENTAGE. VERY DEFINITELY, HOMELESSNESS AND SEVERE RISK IS NOT LIMITED TO INDIVIDUALS. >> THE PROPOSALS. WE'RE JUST SAYING IT'S NOT LIMITED TO ONE. IT DOESN'T MEAN THAT TWO OR THREE. >> CORRECT. >> THERE'S VERY RARELY MORE THAN ONE. >> TWO. >> I WAS ABOUT TO MAKE THAT SUGGESTION. WE COULD IF WE WANTED TO, WE COULD SAY FOR THE LARGER REGIONS, THREE AND SIX, WHEREVER THAT POPULATION THRESHOLD IS, WE WOULD SAY TWO ARE ALLOWED. IT'S NOT [OVERLAPPING]. >> DOES NOT GUARANTEE TWO. >> I THINK THAT'S REASONABLE. >> I UNDERSTAND THE BIAS [INAUDIBLE] ESPECIALLY FOR BIG REGIONS SEEMS HAPPY. YOU HOPE YOU SHOULD GET ALL DEALS IN HOUSTON. IS THERE CONCURRENCE FROM THE BOARD? YOU CAN ADD IN THAT. [OVERLAPPING] >> ON AGAIN. DON RICKENBACKER AGAIN. I WANTED TO TALK ABOUT FORCE MAJEURE AND THE CHANGES THAT ARE BEING MADE FOR FORCE MAJEURE AND FULLY UNDERSTAND WHERE THIS BOARD IS COMING FROM WITH RESPECT TO FORCE MAJEURE. BUT THE QUALIFIER, THAT YOU CAN'T SEEK FORCE MAJEURE UNLESS CONSTRUCTION HAS ALREADY STARTED. IF YOU WANT TO CONTINUE TO HAVE THAT, I JUST HOPE THAT WE CAN ADD SOME DISCRETION, IF YOU WILL, SO THAT IF SOMETHING UNIQUE, THAT IS A TRUE, SUPPORTIVE, EXCUSE ME, FORCE MAJEURE TYPE OF ACTION ITEM THAT WE USED TO LOOK AT MANY YEARS AGO BEFORE ALL OF THIS FORCE MAJEURE ACTION IS TAKING PLACE OVER THE LAST COUPLE OF YEARS. THERE SHOULD BE SOME DISCRETION FOR THE BOARD TO TAKE UP CONSIDERATION OF SOMETHING THAT'S A TRUE FORCE MAJEURE EVENT THAT TOOK PLACE PRIOR TO COMMENCEMENT OF CONSTRUCTION. IF AT ALL POSSIBLE, I WOULD LIKE TO ADD SOME QUALIFIER IN THE RULES THAT WOULD ALLOW FOR THAT. THANK YOU. >> ARE YOU IMPLYING THAT SOME OF THE FORCE MAJEURE APPLICATIONS REQUESTED NOT AGE THROUGH? >> WELL, I DON'T MEAN THAT. I KNOW [OVERLAPPING] WHAT YOU ALL ARE TRYING TO DO. [LAUGHTER] YOU'VE GOT 11 FORCE MAJEURE ACTION ITEMS COMING UP BEFORE YOU, AND I UNDERSTAND ALL THAT. BUT I THINK THAT THE SOLUTION IS TOO HARD SET. IF SOMETHING HAPPENS THAT'S PRIOR TO COMMENCEMENT OF CONSTRUCTION, THAT'S A TRUE FORCE MAJEURE TYPE OF EXAMPLE, WHICH I ASSUME SHE'S GOING TO SPEAK TO. I THINK THAT THERE SHOULD BE SOME DISCRETION FOR THE BOARD TO TAKE IT UP. ANYWAY. THANK YOU. >> BUT CORRECT ME IF I'M WRONG IF I JUST READ THAT IN. THE WAIVER IF BE REQUESTED, EVEN IF WE SAID FOR 180 DAYS. IF SOMETHING HAPPENS THERE'S AN EARTHQUAKE THE BRIDGE GOING INTO [INAUDIBLE] JUST WHATEVER A TRUE FORCE MAJEURE THEY CAN REQUEST A WAIVER EVEN DESPITE A WAIVER OF THE 180 DAY EVEN IF WE ARE NOT PROPOSING THAT. >> EXCELLENT, BECAUSE THAT WAS GOING TO BE MY SUGGESTION. CATHERINE SARR TAP QAP COMMITTEE, THAT WAS GOING TO BE MY QUESTION SUGGESTION IS THAT SHOULD SOMETHING HAPPEN PRIOR TO CONSTRUCTION COMMENCEMENT, WOULD WE BE ABLE TO REQUEST THAT WAIVER TO COME BACK? >> [INAUDIBLE] WAIVER REQUEST. >> SURE. >> THEN FOCUS ON YOUR WAIVER [INAUDIBLE]. [02:45:03] >> I THINK THAT'S THE SOLUTION. >> WHAT WE'RE TALKING ABOUT HERE IS POSTAL AWARD. IT'S NOT SOMETHING THAT [INAUDIBLE] FILED AT THE TIME OF APPLICATION. POSTAL AWARDS [INAUDIBLE] REQUEST WAIVER OF THAT PORTION OF [INAUDIBLE] GRANTS THAT PROBABLY THE SAME TIME [INAUDIBLE] [OVERLAPPING]. >> [INAUDIBLE] >> I HAVE A PERFECT EXAMPLE THAT HAS ACTUALLY HAPPENED TO ME. I WAS UNDER[LAUGHTER] I HAD A SELLER DIE AND THEY HAD TO GO TO PROBATE. >> [INAUDIBLE] [LAUGHTER]. >> WAS NOT CHARGED WITH MURDER. >> DO WE HAVE AN [INAUDIBLE] ADDRESS? >> NO, I THINK THAT WOULD, THOUGH. I APPRECIATE IT. >> YEAH. YES, MA'AM. >> GOOD AFTERNOON, CHAIRMAN, AND THE BOARD. MY NAME IS CARLA MANCHA, AND I AM THE CEO OF THE HOUSING AUTHORITY OF THE CITY OF BROWNSVILLE IN CAMERON COUNTY. THANK YOU FOR THE OPPORTUNITY TO AGAIN COME BEFORE YOU TO COMMUNICATE OUR REQUEST TO AMEND SECTION 11.63C. THIS SECTION REFERENCES CHOICE, NEIGHBORHOOD, PLANNING, AND IMPLEMENTATION AWARDEES. THE HUD CHOICE NEIGHBORHOOD PROGRAM LEVERAGES SIGNIFICANT PUBLIC AND PRIVATE DOLLARS TO SUPPORT LOCALLY DRIVEN STRATEGIES THAT ADDRESS STRUGGLING NEIGHBORHOODS WITH DISTRESSED PUBLIC HOUSING THROUGH A COMPREHENSIVE APPROACH TO A NEIGHBORHOOD TRANSFORMATION. THESE ARE EXTREMELY COMPETITIVE GRANTS, AND ONLY FIVE PUBLIC HOUSING AUTHORITIES IN TEXAS HAVE BEEN AWARDED A CHOICE NEIGHBORHOOD GRANT SINCE THE INCEPTION OF SED PROGRAM IN 2010. THE QAP STATES THAT THE BOARD SHALL ALLOCATE COMPETITIVE TAX CREDITS TO THE HIGHEST SCORING DEVELOPMENT, IF ANY, THAT IS LOCATED IN A NEIGHBORHOOD, WHICH IS A RECIPIENT OF A HUD CHOICE NEIGHBORHOOD PLANNING OR IMPLEMENTATION GRANT. ONE OF THE THREE THRESHOLD REQUIREMENTS IS THAT AT LEAST ONE COUNTY IN THE URBAN SUBREGION NEEDS TO HAVE A POPULATION THAT EXCEEDS 950,000. THIS IS THE REQUIREMENT THAT WE ASK TO BE AMENDED IN ORDER TO ALLOW BROWNSVILLE, WHICH IS A CHOICE NEIGHBORHOOD AWARDEE TO BENEFIT FROM THIS SECTION IN THE QAP. HE DOGO COUNTY IS THE LARGEST COUNTY IN REGION 11, BUT ONLY HAS 894,462 IN POPULATION. THEREFORE, BROWNSVILLE WILL NOT QUALIFY TO BE AWARDED A 9% CREDIT UNDER THE CURRENT QAP RULE REFERENCING CHOICE NEIGHBORHOOD AWARDEES. OF THE FIVE TEXAS COMMUNITIES AWARDED A CHOICE NEIGHBORHOOD GRANT, ONLY THREE ARE PENDING TO REDEVELOP THEIR RESPECTIVE SITES. ONE IS FORT WORTH, WHICH I UNDERSTAND THAT WITH THE LATEST 9% HOUSING TAX CREDIT AWARD, WILL COMPLETE THEIR REDEVELOPMENT GOALS. HOUSTON IS THE SECOND PHA, AND THEN THE THIRD IS BROWNSVILLE. IF THE BOARD APPROVES LOWERING THE POPULATION REQUIREMENT, PHA CAN THEN LEVERAGE THE CHOICE NEIGHBORHOOD DESIGNATION AND THE 9% HOUSING TAX CREDIT PROGRAM TO PRESERVE AND EXPAND THE SUPPLY OF AFFORDABLE HOUSING BY HELPING US REDEVELOP OUR 1943 PUBLIC HOUSING SITE VICTORIA GARDENS. BUT MORE IMPORTANTLY, YOU WILL HELP US TO INCREASE AFFORDABLE HOUSING OPTIONS FOR THE MOST VULNERABLE LOW INCOME FAMILIES THAT RESIDE IN A COUNTY WITH ONE OF THE HIGHEST POVERTY RATES IN OUR STATE. IN ADDITION TO OUR PHA SUBMITTING A LETTER TO STAFF, REQUESTING FOR THE DECREASE IN THE POPULATION REQUIREMENT, A LETTER FROM STATE REPRESENTATIVE AARON GAMES AND STATE SENATOR MORGAN LA MANTHA WERE ALSO SUBMITTED AND SET LETTERS ARE FOUND ON PAGE 624 AND 644 IN THE BOARD BOOK. I DO WANT TO THANK YOU AND THE STAFF FOR RECOGNIZING THE IMPORTANCE AND VALUE THAT THE HUD CHOICE NEIGHBORHOOD PROGRAM BRINGS TO A COMMUNITY. KNOW THAT LOWERING THE POPULATION REQUIREMENT, YOU DO NOT RUN THE RISK OF OPENING THE FLOODGATES OF FUTURE AUTOMATIC AWARDS. THIS IS EVIDENT IN THE LOW NUMBER OF AWARDS HUD MAKES AND THE CURRENT NUMBER OF ONLY TWO HOUSING AUTHORITIES IN TEXAS PENDING TO REDEVELOP. ON BEHALF OF THE FAMILIES THAT I REPRESENT AND THE FAMILIES THAT I WORKED FOR, I HUMBLY REQUEST THAT YOU PLEASE CONSIDER LOWERING THE POPULATION REQUIREMENT. THEN AGAIN, THIS IS ONLY FOR THE REDEVELOPMENT OF [02:50:02] OUR 1943 PUBLIC HOUSING VICTORIA GARDENS SITE. THANK YOU. >> THANK YOU. DOES ANYONE RECALL WHY I SAID 950. >> SURE. THIS WAS PUT INTO PLACE WHEN FORT WORTH RECEIVED THEIR CHOICE NEIGHBORHOOD GRANT AND IT WASN'T JUST FOR FORT WORTH. IT WAS WITH THE ANTICIPATION THAT OTHER LARGE CITIES IN TEXAS WOULD BE RECEIVING SIMILAR GRANTS. THE PARTICULAR GRANT THAT WAS IN QUESTION AT THE TIME, THOUGH, HAD A REQUIREMENT FOR UNIT PRODUCTION AND A VERY LIMITED AMOUNT OF TIME THAT THEY HAD TO PRODUCE THOSE UNITS. OTHERWISE, THEY RISKED LOSING THE MONEY TO THE FEDERAL GOVERNMENT. THIS WAS ADDED TO THE QAP TO ALLOW THEM TO FULLY EXPEND THAT GRANT. THE POPULATION THRESHOLD CARL, CAN YOU REMIND ME? DID BROWNSVILLE HAVE ITS GRANT AT THE TIME THAT THIS WENT INTO THE QAP OR DID YOU ALL GET IT AFTER THE FACT? >> WE RECEIVED OUR GRANT IN 2021. >> IN 2021, AND I BELIEVE THAT THIS WAS ADDED TO THE QAP. IT'S BEEN SINCE I'VE BEEN IN THIS JOB, SO THIS WAS 2022 OR 2023. THIS WAS IN AFTER. IT MIGHT HAVE BEEN JUST TO KEEP CARLA OUT. WITH ALL DUE RESPECT. >> I KNOW BROWNSVILLE VERY POPULAR TODAY. >> THE REASON THAT WE TRY TO AVOID AUTOMATIC AWARDS IN THE VERY SMALL REGIONS IS THAT THEY GET SO FEW AWARDS THAT YOU ARE SUBSTANTIALLY DECIDING THE ROUND IN THOSE REGIONS IF AN AUTOMATIC AWARD IS MADE. I DON'T BELIEVE THAT THE GRANT THAT BROWNSVILLE HAS A REQUIRED UNIT PRODUCTION OR TIMELINE, PLEASE CORRECT ME IF I'M WRONG ABOUT THAT. I DON'T BELIEVE IT HAS THAT, AND SO STAFF DIDN'T FEEL QUITE THE URGENCY TO LOWER THE THRESHOLD TO ALLOW FOR THAT AUTOMATIC AWARD. HOWEVER, THIS IS REALLY JUST A POLICY CALL. THE DOWNSIDE IS THAT YOU'RE DECIDING A SIGNIFICANT AMOUNT OF THE ROUND IN THAT REGION. THE UPSIDE IS THAT YOU'RE HELPING THE HOUSING AUTHORITY OF THE CITY OF BROWNSVILLE REDEVELOP SOME VITAL HOUSING. THERE ARE PROS AND CONS TO BOTH OF THOSE. IN GENERAL, WE'RE A LITTLE CONSERVATIVE WHEN IT COMES TO AUTOMATIC AWARDS, WHICH IS WHY WE DIDN'T RECOMMEND LOWERING THE POPULATION THRESHOLD, BUT IF THE BOARD WANTS TO DO THAT, WE CAN CERTAINLY ACCOMPLISH IT. NO PROBLEM. >> SINCE THIS IS JUST A NUMBER, YOU COULD CHANGE IT AFTER [INAUDIBLE] TWO THAT RACK NUMBER. >> IT WAS JUST ARBITRARILY DECIDED. IT'S NOT LIKE SOME STATUTE OR FEDERAL. [OVERLAPPING]. >> YEAH, NOTHING WE DO IS ARBITRARY. >> THE SESIDE ITSELF WAS MADE UP BY STATS NOT ANY FEDERAL OR STATE. BUT THE IDEA WAS TO LIMIT THE EFFECT, AND IT WAS BECAUSE OF THE UNIT THAT NEED TO BE BUILT. MORE THE IMPLEMENTATION GRANT, NOT [INAUDIBLE] BUT IF YOU WANT TO WITH THIS ONE PROJECT? >> WELL, THIS IS ONLY FOR A SPECIFIC PER REGION OVER THAT POPULATION. >> CORRECT. YES. >> BROWNSVILLE WOULDN'T BE COMPETING AGAINST EL PASO, FOR INSTANCE. >> THAT IS CORRECT. THAT'S TWO SEPARATE REGIONS. >> BROWNSVILLE WOULD COMPETE AGAINST MCCALL. >> CORRECT. >>IT'S NOT LIKE AUTOMATIC. HERE'S THE BROWNSVILLE USING AUTHORITY IF SOMEONE CAME UP WITH A SIMILAR PROJECT IN MCCALL THERE WOULD STILL BE A SWORN COMPETITION. >> THEY WOULDN'T HAVE THE SAME [INAUDIBLE]. >> CHANGE RECORD FOR HER. SHE'S GOING IN. >> IT'S JUST ONE AND HUD ONLY AWARDS AN AVERAGE OF FIVE IMPLEMENTATION. WHEN VICTORIA GARDENS WAS AWARDED IN 2021, ONLY IT WAS ONE OF EIGHT NATIONWIDE. IT'S A VERY HIGHLY COMPETITIVE GRANT WITH HUD. >> MR. CHAIRMAN, YOU SAID THIS IS A POLICY ISSUE. THAT'S TRUE. LET'S REMEMBER THAT WE STARTED THIS MEETING AT LESS THAN 1 HOUR, 135 ON THE THIRD WAIVER PLEADING REQUEST VERSUS SOMEONE WHO'S ALREADY DOING DONE IT. I DO KNOW FROM MY EXPERIENCE THAT I THINK IT IS EXTREMELY DIFFICULT TO WIN THE AWARD. THE FACT THAT THE AWARD OF EXCELLENCE IS ALREADY GIVEN. WE WANT MORE IN TEXAS. WE DON'T WANT NEW YORK TO GET CF. TEXAS. MR. MARSHALL? >> MR. CHAIRMAN, IS THERE THE ABILITY TO PUT A SUNSET ON A PROVISION? THAT WE HAVE THIS PROVISION IN THIS QAV, BUT AT THAT PROVISION REQUIRED? >> YOU HAVE TO ADOPT IT EVERY YEAR. TECHNICALLY YOU CAN DO TWO YEAR QAV. WE WE HAVEN'T DONE THAT YET. BUT YEAH. NO, YOU COULD YANK THIS. FOR ONE YEAR, CHANGE THE BRACKET FOR ONE YEAR AND THEN CHANGE BRACKET BACK OR YANK [02:55:04] I THINK FORWARD IS ABOUT WRAPPED UP WITH THERE IT. >> THAT WE COULD RECOGNIZE SPECIAL PURPOSE WITHOUT CHANGING [INAUDIBLE]. >> YES. >> GIVEN THAT THIS PARTICULAR INSTANCE, IT HAS A CONDITION PRECEDENT THAT MEANS YOU HAVE TO HAVE THIS WORD ALREADY. RIGHT HERE. I DON'T SEE ANY PROBLEM JUST MOVING IT PERMANENTLY AT 8:50. THE NEXT ROUND, SOMEONE SAYS, OUR POPULATION IS 825, CAN WIN WE'VE GOT THIS OTHER REWARD IN TAN. THE QUESTION IS, DO WE PUBLISH IT AT 890 OR DO WE LEAVE IT AS IS TIC COMMENT AND INCORPORATE THE LOWER? >> THERE'S REALLY NO RISK TO US, MR. CAM TO CHANGE IT TO 800K. >> RIGHT. >> THERE'S NO RISK TO THE RISK. I DON'T KNOW WHY WE WOULDN'T MAKE THIS CHANGE AND MOVE ON. >> I'M AMENABLE TO THAT. >> I GUESS THE OTHER QUESTION I LEAVE THIS IF WE CHANGE TO 500 K AND YOU PUT IT OR REGION FOUR WOULD BE IN THE DEAL, ALL OF THESE SIT ARE DOING THE STILL COMPETE IF THEY HAD. >> CORRECT. THIS IS THIS BOARD OR THIS IS A FEDERAL APPLICATION TO. >> WHY WE HAVE A POPULATION NUMBER? >> WHY WE HAVE A POPULATION THAT NUMBER AT ALL THIS? WHAT WOULD JUST GET THE BEST WIN AT THE VERY TOP AND PUT MORE HOUSING IN TEXAS [INAUDIBLE]? >> I HAVE SOME [OVERLAPPING][LAUGHTER]. >> I THINK DRASTIC CHANGES RATHER THAN THE ASK WAS FOR A POPULATION DECREASE. THAT IS A NUMBER THAT CAN BE PLAYED WITH FOLLOWING COMMENT, I THINK, WIPING OUT. THAT CREATES THE CONCERN THAT YOU WOULD THEN BE PUTTING THAT OUT FOR PUBLIC COMMENT AND ADDING A NUMBER BACK IN. IF THERE'S COMMENT THAT ACTUALLY WOULD SUPPORT MAYBE THERE SHOULD HAVE BEEN A POPULATION NUMBER. >> JUST COUNSEL, THIS IS A FEDERAL APPLICATION, CORRECT? >> YES. >> I LIVE IN REGION 4. WE DON'T EVEN HAVE 800,000 FEET IN REGION 4, SO WE WANT TO GO AFTER. WE COULD EVEN GET THERE. IF WE STRIKE IT, THEN LYRA REDFORD COUNTY, WHICH IS THE SECOND FEST COUNTY ALL OF THE STATE TO A SHOP. THEY NOT WORK AFTER HUD LET GO TO. >> HUD DOESN'T HAVE A POPULATION THRESHOLD REQUIREMENT FOR THEIR CHOICE NEIGHBORHOOD. THIS IS ON HUD'S PERSPECTIVE, I MEAN, IT COULD BE 100K OR COULD BE 900K. >> THIS IS A REGION. RESPECTFULLY, THOUGH THIS IS THE CROSSOVER EPISODES OF FUNDING HERE. THIS IS A SEEKING A HUD NEIGHBORHOOD CHOICE PLANNING OR AN IMPLEMENTATION AGREEMENT FROM HUD. THOSE ARE TO DO DIFFERENT THINGS. IT'S NOT SAYING THAT THIS IS THE BEST PLACE WHERE THE STATE SHOULD USE ITS LOW INCOME HOUSING TAX CREDITS. THAT THESE ARE CERTAINLY RELATED, BUT THAT WOULD BE THE CHOICE THAT THIS BOARD IS MAKING IS TO SAY, WHATEVER HUD DECIDES TO DO A NEIGHBORHOOD CHOICE PLANNING AWARD THAT WE ARE GOING TO INSTANTLY THEN GIVE AN APPLICATION IN THAT AREA, WE'RE GOING TO GIVE THEM WHATEVER THAT APPLICATION IS. THERE MAY BE SOME DISAGREEMENT OUT THERE THAT WE HAVE NOT CONSIDERED. THAT'S THAT'S THE ONLY POINT I'M MAKING. THAT'S A FAIR STATEMENT. >> JUST LOWERING THE POPULATION, MIGHT BE A BETTER WAY GO TO ACCOMPLISH THAT. >> IT'S MORE CONSERVATIVE, BUT YOU LOWER IT NOW, AND THEN YOU CAN MAKE IT ZERO AFTER. THEN IT'S THE SAME WHAT EAR WAS SAYING PROBLEM. >> IF I COULD JUST MAKE ONE COMMENT. IF YOU ARE CONSIDERING LOWERING THAT WHATEVER THAT NUMBER IS GOING TO BE, PLEASE PUT IT IN THE DRAFT SO THAT ANYBODY THAT'S NOT AT THIS MEETING THAT HASN'T HEARD THAT DISCUSSION THAT YOU'RE CONTEMPLATING THAT. [03:00:01] THEY DON'T KNOW TO EVEN COMMENT WHETHER THEY LIKE THAT OR NOT. THEY'RE GOING TO THINK IT'S GOING TO STAY THE SAME SO THEY DON'T KNOW WHETHER TO COMMENT ON IT OR NOT. IF YOU'RE GOING TO PUT IT IN THERE, IT WOULD BE APPRECIATIVE TO PUT THAT NUMBER IN THERE SO THAT PEOPLE KNOW TO COMMENT. >> OF COURSE. >> DO WE HAVE A LEVEL AT WHICH UNDER 989400750500. >> I STRIKE IT. >> I LAID THAT FOR COM TO REASON WITH THE RISK THAT IS. I'M NOT SAYING THAT THERE'S NOT A REASON WHY THEY WOULD BE FORWARD VERY SPECIFICALLY TO DO WHAT THEY WANTED ACES, AND FORWARD AS A REASON. THERE'S NO DOUBT ABOUT THAT. IF IT COMES BACK, WE NEED TO 500K OR 800K. >>SURE. >> WE ADJUST THAT TWO MONTHS. >> MR. CHAIRMAN, I JUST REMEMBER THE LAST TIME HE WAS FOR FORT WORTH, ONCE AGAIN, YOU'RE TALKING ABOUT AT THAT TIME PROJECTS THAT HAD ALREADY BEEN LABEL OF EXCELLENCE. THESE ARE NOT. WE WANT TO KEEP WE WANT PROJECTS OF FAX ONE. ONCE AGAIN, WE WANT TEXAS NOT NEW YORK, CALIFORNIA, TEXAS. >> BUT CAUTIONARY POINT TO SOME OF THE RULES, I THINK COUNSEL WAS TRYING TO SAY, IF WE GO AHEAD AND JUST STRIKE THIS OFF AN ANNUAL QAP, THEN DO WE HAVE THE LATITUDE A MONTH FOR AN HOUR TWO MONTHS TO INSERT A NUMBER? >> NO. >> WE WOULD HAVE TO COUNT THAT THERE. WOULDN'T IT BE PRUDENT TO JUST LOWER THE NUMBER RIGHT NOW WITH THE OPTION THAT THAT NUMBER IS FLEXIBLE DURING THE COURSE OF THIS. >> THAT'S WHAT IT WAS JUST ABOVE SUGGEST. >> PUT THE PUT THE NUMBER AT 7:50 AND SHE'S GOOD WITH COUNTY IS ABOVE SEVEN. >> CAMERON COUNTY. I'M SORRY. HE DONEGAL, WHICH IS IN REGION 11, HAS 894,000. WE WOULD BE FINE IF IT'S AT 7:50. >> [INAUDIBLE]. >> THANK YOU. >> [INAUDIBLE]. >> JUSTIN MEYER ARC'S ADVANTAGE. I JUST HAVE ONE QUESTION TO ASK. IN REGARDS TO THE TIE BREAKERS FOUND ON PAGE 53, I MUST RESPECTFULLY ASK, WHAT DOES QUASI GOVERNMENTAL AGENCY MEAN? IF YOU CAN'T DEFINE A TERM, THEN THAT JUST MEANS THAT YOU'VE SUDDENLY CREATED ONE MORE REASON FOR A DEVELOPER TO HAVE TO COME STAND BEFORE YOU HAT IN HAND AND ASK FOR A DETERMINATION FROM YOUR SMILING FACES. I FEEL IF WE HAVE TO ASK NOW, THEN IT MIGHT BE PERTINENT THAT THAT BE A DEFINED TERM IN THE FINAL QAP. THANK YOU. >> IS THAT THE FUN I GUESS IT'S LIKE QAPS MAYBE MUD. >> THERE'S PARKS THAT ARE LIKE RUN BY MUDS OR NAVIGATION DISTRICT. >> THEY'RE GOVERNMENT AUTHORIZED, BUT THEY'RE NOT AN ACTUAL GOVERNMENT. >> IT'S A NICE PARK JUST AS THE CITY HAS SHOULD BE ABLE TO STILL USE IT. >> IT'S JUST SOMETHING WE CAN WRITE ABOUT THE FUTURE. I DID. BUT THAT IS A DEFINITION, I MEAN, I THINK IT IS. USE EXAMPLES SUCH AS. >> NOT A FAN OF EXAMPLES, BUT I'M GUESSING WE CAN COME UP WITH A STATUTORY DEFINITION. >> THANK YOU. >> MR. CHAIRMAN, DO YOU? IT AS DIAL. I'M JUST THINKING ABOUT THE FEDERAL GOVERNMENT. THEY'RE BOARD MEMBERS LIKE HOUSE NOT JUDGES NATIONAL LABOR RELATIONS. [INAUDIBLE]. >> THIS IS FINE. >> TRACY FINANCIAL NATIONAL CHURCH RESIDENCE A TOTALLY NEW TOPIC. THE OTHER NEW ADDITION IN THIS DRAFT OF THE QAP WILL EXACERBATE THE PROBLEM IN VIOLATION OF 230-66-0701, WHICH STATES THE DEPARTMENT MUST MAXIMIZE AWARDS AND PRESERVE AS MUCH HOUSING AS POSSIBLE IS THE ITEM OF DECREASING THE LEVERAGING REQUIRED AND THE AT RISK SET ASIDE. [03:05:04] CURRENTLY, THERE IS NO REAL MECHANISM TO CURB CREDIT REQUEST IN AT RISK. I AM OFTEN WAY BELOW THE LEVERAGE REQUEST WHEN I SUBMIT MY APPLICATION. A CONTINUED PROBLEM AND AT RISK ARE IDENTITY OF INTEREST TRANSACTIONS, WHICH ARE WHICH IS WHERE THE DEVELOPER CASHES OUT THE ACQUISITION OF THE PROPERTY. IN 2024, ONE AT STEEL, THE ONLY ONE THAT WENT TO A MAJOR METRO AREA IN SIAN MARCUS, THIS DEVELOPER CASHED OUT $4 MILLION TO THEMSELVES ON TOP OF DEVELOPER FEES. THEIR CREDIT ASK WAS 28,000 PER UNIT. THIS IS COMPARED TO THE AVERAGE ACQUISITION REHAB ASK OF 16,000 UNIT. HAD THIS CASH OUT NOT BEEN ALLOWED, IT IS LIKELY ANOTHER PROJECT AND ROUND COULD HAVE BEEN FUNDED. WE STRUCTURE ALL OF OUR IDENTITY OF INTEREST TRANSACTIONS WITH THE SELLER NOTE. OUR INVESTORS REQUIRE THE SALE AT FAIR MARKET VALUE. THE SELLER NOTE STRUCTURED AT APPRAISED VALUE LESS ANY LIENS AND PAYABLES REQUIRED TO BE PAID AT THE CLOSING TABLE. IT IS A SIMPLE FIX TO SOLVING THIS ABUSE WITHIN THE 9%. ANOTHER VERY SIMPLE FIX WOULD HAVE A POINT AWARD TO ANY DEVELOPMENT, NOT CASHING OUT. WHY ARE WE ALLOWING DEVELOPERS MAJOR PAY DAYS IN THIS COMPETITIVE PROGRAM IN LIEU OF FUNDING MORE PROJECTS. IF YOU WANT TO ALLOW CASH OUT, THEN THERE NEEDS TO BE AN INCENTIVE TO LOWER THE CREDIT REQUEST SO THAT THESE DEVELOPERS ARE NOT GETTING 40% MORE IN CREDIT POOR UNIT THAN THE REST OF US. ANOTHER THING ON THE LEVERAGING. ANOTHER OPTION. I REALLY DON'T THINK THAT THAT 1% SHOULD TAKE PLACE AT ALL. BUT IF IT DOES MOVE FORWARD, I WOULD SUGGEST THAT YOU LIMIT IT TO ABOUT 36 UNITS FOR LOWER. >> YOU CATCH UP. I CAN TELL YOU I WANT TO STAND SO THAT I CAN GIVE YOU A ROUND OF APPLAUSE. >> I THINK THAT ONE OF MY DEALS COULD HAVE GOTTEN FUNDED. YOU CAN JUST SAY FIVE POINTS IF YOU DON'T CASH OUT FOR EVERY SINGLE APPLICATION, AND THAT WILL DISCOURAGE IT. >> IT SEEMS MORE 4% THAN DOES 9%. >> THAT'S BECAUSE MORE 4% APPLICATIONS DO IDENTITY OF INTEREST, AND IDENTITY OF INTEREST IS MOST HEAVILY IMPACTED IN THE AT RISK SET ASIDE. >> I WHOLEHEARTEDLY AGREE. I DON'T BEERS 9% THAT WITHOUT SOME PRETTY MAJOR CHANGES IN RIGHT NOW. >> INTRODUCING A NEW SCORING ITEM AT THIS MEETING WOULD BE A DRASTIC CHANGE, I WOULD SAY. >> I THINK THERE MAY BE SOME LEGISLATIVE WORK THAT NEEDS TO BE DONE IN AND THERE WILL BE [INAUDIBLE]. >> AGAIN, I'M ASKING FOR SOME GUARD RAILS ON THIS AND ALSO NOT RS AND PLEASE I KNOW I'M GOING BACK TO RS. PLEASE LEAVE THAT LANGUAGE.I REALLY FEEL LIKE IF THE CITY OF AUSTIN AND HOUSTON AND DALLAS FORT WORTH, AND THE LEGISLATORS IN THOSE COMMUNITIES KNEW THAT THE RULES PREVENT AWARDS AND THEIR LOCATIONS, THAT IS GOING TO CAUSE CONCERN. IF YOU DON'T LEAVE SOMETHING IN THIS QAP TO COMMENT ON, THEN WE CAN OPEN THAT BACK UP. PLEASE LEAVE IT IN THERE FOR COMMENT. >> PAGE 43, 44, AND I FINALLY THAT OF COURSE, RECOMMENDATION WAS TO NOT PUT THAT NEW LANGUAGE IN. >> SURE. >> [INAUDIBLE]. >> TRACY'S COMMENT ACTUALLY TOUCHED ON THREE SEPARATE TOPICS. I'M PREPARED TO SPEAK ON ANY OF THEM, IF YOU WOULD LIKE ME TO. >> CATCH UP, PROCEED. >> THERE'S LEVERAGING, WHICH IS A POINT CATEGORY THAT. >> THEN USDA SECOND TURBANS [INAUDIBLE]. >> [INAUDIBLE]. >> SURE. FOR THE CASH OUT, STAFF IS OBVIOUSLY LOOKING INTO THIS. WE HAVE ADDED A REQUIREMENT TO THE QAP THAT IF THERE IS AN IDENTITY OF INTEREST TRANSACTION WHERE THE MOST RECENT ARM'S LENGTH TRANSACTION WAS WITHIN THE LAST FIVE YEARS, WE DO WANT TO AT LEAST SEE THE MOST RECENT SETTLEMENT STATEMENT. WE'RE NOT PROPOSING ANY ADDITION TO THE RULES THAT WOULD GIVE US ANY TEETH TO DO ANYTHING ABOUT THAT, BUT IT WOULD ALLOW US TO COMPILE INFORMATION SO THAT WHEN WE'RE WORKING ON THE NEXT QAP, WELL IN ADVANCE OF THAT, WE CAN GET INTO ROOMS WITH THE DEVELOPMENT COMMUNITY AND TALK ABOUT WHAT THE SOLUTION TO THE PROBLEM MIGHT BE, [03:10:03] BUT WE NEED TO KNOW THE SCOPE. WE'RE RIGHT. BUT WE NEED TO KNOW THE SCOPE. WE JUST NEED MORE INFORMATION. I THINK BEFORE STAFF IS GOING TO BE COMFORTABLE MAKING STRONG RECOMMENDATIONS. AT RISK, WE'VE DISCUSSED EXTENSIVELY, BUT LEVERAGING HAS ACTUALLY NOT BEEN BROUGHT UP TODAY. I LOST IT. IT'S FINE. I CAN DO IT OFF THE TOP OF MY HEAD. LEVERAGING IS A SCORING CATEGORY THAT GIVES POINTS IF YOUR TAX CREDIT REQUEST IS BELOW A CERTAIN PERCENTAGE OF YOUR TOTAL DEVELOPMENT COST. IF YOUR TOTAL DEVELOPMENT COST IS $20 MILLION IF YOU'RE BELOW 10% OF THAT, YOU GET A POINT, IF YOU'RE BELOW 9% OF THAT, YOU GET TWO POINTS. I DON'T KNOW THE EXACT POINT VALUES OFF THE TOP OF MY HEAD, BUT THAT'S HOW IT SHAKES OUT. OUR USDA AND AT RISK DEALS ARE TYPICALLY VERY SMALL, AND I ACTUALLY HAD TO CALL THREE SEPARATE DEVELOPERS BECAUSE THEY'VE BEEN ASKING FOR THIS THE ENTIRE TIME I'VE BEEN IN THIS JOB, AND IT'S NEVER MADE SENSE TO ME AND I FINALLY CLICKED THIS HERE. THE SIZE OF A REHAB THAT CAN BE DONE ON A SMALL PROPERTY IS DEPENDENT ON THE CAPITAL THAT YOU ARE ABLE TO SOURCE IN ORDER TO DO THAT REHAB. IT'S NOT LIKE DOING A NEW CONSTRUCTION DEVELOPMENT THAT JUST COSTS WHAT IT COSTS. IF YOU HAVE A REHAB TO DO AND YOU CAN COME UP WITH $7 MILLION, YOU'RE GOING TO DO A $7 MILLION REHAB. IF YOU CAN COME UP WITH $9 MILLION YOU'RE GOING TO DO A $9 MILLION REHAB. WITH THE INCREASE IN INTEREST RATES OVER THE LAST COUPLE OF YEARS, THE AMOUNT OF CAPITAL THAT THESE TINY DEALS HAVE BEEN ABLE TO COME UP WITH HAS SHRUNKEN DRAMATICALLY. BECAUSE THEY HAVE TO STAY BELOW WITH THEIR TAX CREDIT REQUEST, A CERTAIN PERCENTAGE OF THE TOTAL DEVELOPMENT COST IN ORDER TO GET THOSE LEVERAGING POINTS, IT'S PUSHING THE REHABS SMALLER AND SMALLER. IF YOU GO FROM $9 MILLION TO $7 MILLION IN ORDER TO MAINTAIN YOUR POINTS, YOU NOW HAVE TO GO FROM A CREDIT REQUEST THAT'S 900,000 DOWN TO 700,000, AND IT'S REALLY LIMITED SPECIFICALLY USDA, BUT ALSO THE SMALLER AT RISK DEALS OVER THE LAST COUPLE OF YEARS IN TERMS OF THE SIZE OF THE REHAB THAT THEY CAN DO. WE'VE PROPOSED IN THIS QAP FOR THOSE AT RISK AND USDA DEALS TO BE ABLE TO ADD AN ADDITIONAL PERCENTAGE POINT. INSTEAD OF 9%, THEY CAN GO TO 10%, INSTEAD OF 8%, THEY CAN BE AT 9%. TRACY'S SUGGESTION THAT MAYBE INSTEAD OF BROADLY APPLYING THAT TO USDA AND AT RISK, THAT WE JUST APPLY IT TO VERY SMALL DEALS IN USDA AND AT RISK. I THINK WOULD SOLVE THE PROBLEM. I HAVEN'T SPOKEN TO ANY OTHER DEVELOPERS ABOUT IT, BUT IT DOES SEEM LIKE A REASONABLE SOLUTION. BUT I AM UNDER THE IMPRESSION THAT THERE NEEDS TO BE SOME MODIFICATION TO THE LEVERAGING CATEGORY FOR THOSE TINY DEALS IN ORDER FOR THEM TO BE ABLE TO DO MEANINGFUL REHABS. >> AS THIS IS PRESENTED NOW, WE CAN ADJUST THE MEMBERS. >> THERE IS NOT A UNIT COUNT THRESHOLD. WE WOULD POTENTIALLY BE ADDING A UNIT COUNT THRESHOLD. THE PERCENTAGE NUMBERS ARE IN THERE. I THINK IT'S DEFINITELY ON THE TABLE THAT THE ACTUAL PERCENTAGES COULD BE CHANGED. BUT IN TERMS OF ADDING A UNIT COUNT, I WOULD DEFER TO MR. ECCLES, IT DOES SEEM LIKE A STRETCH TO ADD THAT IN THE PUBLIC COMMENT PROCESS. >> COULDN'T YOU JUST STRIKE IT IF COMMENT CAME BACK THAT WE DIDN'T WANT THIS? I MEAN, I THINK THERE'S GOING TO BE SUPPORT FOR THIS CHANGE MORE BROADLY, BUT. >> WE HAVE TO DO THIS. >> CORRECT. >> LEVERAGE CHANGE TO APPLY TO DEALS. >> I HAVE SOME SMALLER DEALS. IT MIGHT APPLY TO IT. IT HASN'T BEEN A MAJOR PROBLEM FOR ME. BUT I WANTED TO CONNECT THIS LEVERAGING PIECE TO THE CASH OUT BECAUSE THE MORE LEVERAGE THE REDUCTION AND LEVERAGE ALLOWS THOSE CASH OUTS TO JUST GO UP. THERE'S NOTHING LIMITING THE CASH OUT. THAT IS WHY I HAD CONNECTED THOSE TWO TOPICS. >> WHAT TRACY'S TALKING ABOUT SPEAKS TO THE BROADER LOOK AT THE QAP THAT TAP IS PUSHING FOR THE 2025 RULE. WE WANT TO LOOK AT THINGS HOLISTICALLY SO THAT WE CAN ENSURE THAT ALL OF THE POLICIES LINE UP WITH YOUR DESIRE TO INCREASE UNIT COUNTS. THAT'S GOING TO TAKE A TOP-DOWN REVIEW OF EVERYTHING TO MAKE SURE THAT THERE'S NO CROSS-COMPETING POLICIES AND SCORING ITEMS. I THINK THAT'S SOMETHING THAT WE CAN ACCOMPLISH IN THE 2026 RULE IS WHAT I MEANT TO SAY, AS OPPOSED TO THIS RULE WHERE WE'RE ALREADY LOOKING FOR SITES, AND WE'RE ON THE GROUND RUNNING NOW. WE NEED SOME CERTAINTY AFTER TODAY AS TO WHAT SITES WE NEED TO BE LOOKING FOR. > WE MOVE FORWARD. IS THERE ANY OTHER TOPIC. >> IF I COULD ASK JUST WHAT IS STAFF'S RECOMMENDATION REGARDING ANY MODIFICATION TO [03:15:02] THE PROPOSED RULE AS TO A THRESHOLD UNIT COUNT FOR LEVERAGING? >> IF WE WANTED TO DO A UNIT COUNT, I THINK 36 OR 48 WOULD BE REASONABLE, OR WE COULD LEAVE IT AS IT IS. ABOUT HALF OF THE AT RISK DEVELOPMENTS EVERY YEAR FALL UNDER A 50 UNIT THRESHOLD. IF WE ADDED THAT THRESHOLD, IT WOULD ONLY APPLY TO ABOUT HALF OF THOSE DEALS, WHICH TURNS OUT TO BE ABOUT 7.5% OF OUR STATE CEILING. IT'S A PRETTY SMALL UNIVERSE OF DEALS. I FIND IT PERSUASIVE THAT THE LARGER DEALS IN THE AT RISK SET ASIDE MAY NOT NEED THAT BOOST TO LEVERAGING. I WOULD SUGGEST THAT IT'S A PRETTY REASONABLE PROPOSAL. >> AT WHAT NUMBER TO START WITH? >> LET'S START AT 50. >> IF I COULD MAKE ONE COMMENT ON THE USDA SIDE BECAUSE WE WERE THE ONES THAT ACTUALLY MADE THE REQUEST. ON USDA, EVERY ONE OF THE APPLICATIONS, EXCEPT FOR TWO, HAD TO GIVE UP CREDITS BECAUSE OF LEVERAGING. WE ALL CUT CREDITS BECAUSE OF THAT PROBLEM. WE'VE REQUESTED THAT LEVERAGING MOVE UP. BECAUSE ON SMALLER DEALS, WE'RE TRYING TO STAY WITHIN THE BOX AND GET AS MANY POINTS. ARE YOU GOING TO GO BY EACH DEVELOPMENT BECAUSE IF YOU DO A SCATTERED SITE, YOU GOT TWO DEVELOPMENTS IN THERE AND YOU MAY HAVE 80 UNITS IN THERE. >> IT'S THE TOTAL OF THE APPLICATION. >> IF YOU DO ACCOUNT, IS IT PER DEVELOPMENT THAT'S WITHIN THE DEAL OR IS IT? >> IT'S THE DEAL. THE SCATTERED SITE IS ONE DEAL TO US. I UNDERSTAND THAT IT'S MULTIPLES. >> IT WOULD BE DEVELOPMENT SITE, SO YOU'RE COUNTING THE ENTIRETY OF THE DEVELOPMENT. >> I'LL SAY 50 PER APPLICATION. >> WELL, THAT MIGHT BE PROBLEMATIC BECAUSE YOU'RE PUTTING IN SCATTERED SITES, WHICH IS A DEVELOPMENT SITE. IF YOU DO DEVELOPMENT SITE, YOU COULD HAVE A SITE IN TWO CITIES, WHICH YOU COULD GET 80 UNITS, BUT YOU WOULD HAVE 40 UNITS ON EACH DEVELOPMENT. WE WERE THE ONES THAT REQUESTED AND HE'S HEARD FROM SEVERAL OF THE USDA DEVELOPMENTS. I JUST WANTED TO ADD A LITTLE INFORMATION THERE THAT EVERY ONE OF THE USDA DEVELOPMENTS EXCEPT FOR TWO, AND ONE OF THE TWO THAT DIDN'T REQUEST IT ACTUALLY GAVE UP THE POINT, AND THEY DIDN'T GET FUNDED THIS YEAR BECAUSE OF THAT. HAD THEY REQUESTED THE POINT AND GAVE UP CREDITS, THEY WOULD HAVE BEEN FUNDED. >> TAP DIDN'T HAVE A PROBLEM WITH THE LANGUAGE THAT WAS ADDED IN ON THIS ITEM. IF WE'RE TALKING ABOUT CHANGING IT, IT WOULD BE SOMETHING THAT WE WOULD NEED TO REVIEW AND LOOK AT AND UNDERSTAND BEFORE WE CAN OPINE. I WANT TO POINT OUT THAT THIS IS ONLY ONE OF THE WAYS THAT YOU LIMIT CREDIT REQUESTS. YOU HAVE LEVERAGING, YOU HAVE COST PER FOOT, AND YOU HAVE THE OVERALL TWO MILLION-DOLLAR LIMIT. THERE ARE THREE DIFFERENT WAYS THAT WE'RE ALREADY LIMITING CREDIT REQUESTS, AND I WOULD HESITATE TO SUPPORT SOMETHING THAT WOULD ADD ANOTHER LAYER THAT WOULD REDUCE OUR ABILITY TO REQUEST CREDITS. >> JUST TO BE CLEAR, IT'S ALREADY A THING IN THE QAP SO WE'RE NOT ADDING A NEW LIMIT. THERE IS JUST A SUBSET OF DEVELOPMENTS THAT IS DISPROPORTIONATELY IMPACTED BY ONE OF THE LIMITS, AND WE ARE SUGGESTING THAT THE THRESHOLD BE MODIFIED JUST A LITTLE BIT TO ALLOW SOME LEGAL ROOM FOR THOSE DEVELOPMENTS, YEAH. >> NOW IS A THRESHOLD. >> SURE. >> LOOK FORWARD TO COMMENTS. >> YES. >> IS LANGUAGE OPEN FOR COMMENT? [OVERLAPPING] >> IS THIS ANOTHER TOPIC AREA. >> NO, YESTERDAY WE DIDN'T ADDRESS IT. >> WELL, LET'S PLEASE SUBMIT COMMENT ON THE ACTUAL POST PUBLISHED QAP. I WOULD LIKE TO GET THIS WRAPPED UP. [OVERLAPPING] >> IF YOU LEAVE AT RISK LANGUAGE AS IT WAS LAST YEAR, WE CAN'T COMMENT ON IT. LEGISLATORS CAN'T COMMENT ON IT. THAT'S WHY I'M SAYING, PLEASE DON'T REVERT TO ESTERS LANGUAGE AS IT GOES TO PUBLIC COMMENT. IT MOVES THE ABILITY TO COMMENT. [BACKGROUND] YOU CAN'T CHANGE IT. [03:20:02] >> IF WE LEAVE IT IN AND THEN COMMENT, WE'LL AGREE WITH THIS CHANGE. WE CAN STILL BE TO LEAVE IT IN THERE. >> WHAT'S BEING PROPOSED IS AN ENTIRELY DIFFERENT SCHEME OF HAVING TREAT IT. GOING BACK TO THE OLD LANGUAGE IS NOT AN OPTION WHEN WE'RE DOING AS WE ARE DOING HERE. IF THIS WAS AN AMENDMENT, THAT WOULD BE ONE THING, BUT WE ARE ACTUALLY TAKING AWAY THE OLD RULE AND THEN PUTTING IN A NEW RULE. ONCE YOU DISPOSE OF THE 2024 QAP, YOU ARE THEN JUST LOOKING AT THE NEW RULE AS IT'S PROPOSED. IT GOES OUT FOR COMMENT AND THEN IT'S NOT BEING COMPARED TO THE OLD RULE, IT'S JUST THE RULE AS YOU'RE PUTTING IT OUT THERE. SO THE PROPOSED LANGUAGE NEEDS TO BE VERY CLOSE TO WHAT YOU CAN FINISH WITH, AND IT'S IN THOSE MARGINS THAT PUBLIC COMMENT PLAY A ROLE. >> I THOUGHT IN THIS CASE, TRACY WANTS TO PROPOSE INSERTING NEW LANGUAGE. IF THAT'S DONE, EVERYONE ELSE CAN SAY WE DON'T WANT THIS, AND THEN IN THE END, WE CAN PULL THAT INSERTION. [OVERLAPPING] THIS NEW LANGUAGE THAT IS IN THE BOARD BUT THAT'S BEING INSERTED, THAT'S ADDING ON TO THE OLDER LANGUAGE, THE EXISTING LANGUAGE. >> SINCE WE'RE DOING A REPEAL OF REPLACE RATHER THAN AMENDING THE '24 QAP, WE CAN CUDDLE WITH NUMBERS, BUT YOU'RE SAYING WE CAN'T DELETE THESE INSERTIONS. >> THE SPECIFIC POINT AT THIS TIME CAN CORRECT ME IF I'M WRONG, IS THE TWO STAGE TREATMENT USDA AT RISK, HAVING THEM BEING SEPARATED OUT FROM SO THAT USDA GETS THEIRS, AND THEN AFTER AT RISK, THEY COME BACK IN. THAT IS AN ENTIRELY NEW SCHEME THAT IS NOT REFLECTED IN THE OLD LANGUAGE. >> CORRECT. >> LET'S BACK UP HERE JUST A SECOND. YOU'RE ELIMINATING A QUALIFYING DEVELOPMENT AS AT RISK. THAT'S WHAT THAT LANGUAGE IS DOING. A DEVELOPMENT THAT HAS SUBMITTED INFORMATION THAT QUALIFIES AT RISK. YOU ARE SAYING IT CANNOT COMPETE AS AT RISK. TAKE AWAY OVER HERE IN THE USDA SET ASIDE, THAT LANGUAGE IS SAYING I DON'T CARE WHETHER YOU'VE SUBMITTED THE INFORMATION AS AN AT RISK AND YOU'RE QUALIFYING AS AN AT RISK DEVELOPMENT, YOU CANNOT COMPETE. THAT'S NOT RIGHT. THE STATUTE SAYS, USDA 514, 515, 516, AS WELL AS THEIR SUBSIDIES OF 1485, 84, 85 AND 86 ARE QUALIFYING AT RISK DEVELOPMENTS. THAT'S WHAT STATUTE SAYS. >> RESPECTFULLY, IF YOU WANT TO COMPETE IN THE AT RISK, YOU CAN SUBMIT YOUR APPLICATION AS AT RISK. IF IT QUALIFIES FOR BOTH AT RISK AND USDA, YOU CAN SUBMIT IT IN ONE OR THE OTHER. THIS IS THE GRAND POLICY CALL THAT I THINK THAT YOU'RE GOING TO TRY TO GET RESOLVED IN THE LEGISLATURE. >> IF YOU WANT TO SAY PICK A HORSE, THAT'S FINE. THEN SAY PICK A HORSE AND YOU GOT TO RIDE THAT HORSE. YOU EITHER GO IN AS AT RISK OR YOU GO IN AS USDA, BUT YOU DON'T PICK BOTH SET ASIDES. I DON'T HAVE A PROBLEM WITH THAT. >> I THINK THAT'S HOW THIS IS SET UP IN THE PROPOSED LANGUAGE AS IT READS. >> THIS IS MORE BENEFICIAL POTENTIALLY. >> I THINK THAT WITH SOME VERY SLIGHT LANGUAGE TWEAKS, I CAN UNDERSTAND HOW ROBBIE WOULD READ THIS AS NOT ACCOMPLISHING WHAT THE TWO OF YOU ARE TALKING ABOUT RIGHT NOW. I THINK WITH SOME VERY MINOR LANGUAGE TWEAKS, WE CAN GET SOMEWHERE THAT IT SOUNDS LIKE IS ACCEPTABLE AS A COMPROMISE. RIGHT NOW, IT SAYS ALL ELIGIBLE NON-USDA APPLICATIONS IN THE AT RISK SET ASIDE HAVE BEEN FUNDED, AND THAT DOES MAKE IT SOUND LIKE A USDA DEAL SUBMITTED IN THE AT RISK BECAUSE IT JUST SAYS NON-USDA APPLICATIONS. IT DOESN'T SAY APPLICATIONS THAT WOULD BE ELIGIBLE FOR THE USDA SET ASIDE OR THAT WERE SUBMITTED IN THE USDA SET ASIDE. [03:25:03] I THINK THAT WE CAN TWEAK SOME LANGUAGE, CLARIFY THAT THAT IS WHAT WE'RE TRYING TO ACCOMPLISH AND WE'VE REACHED A COMPROMISE HERE. >> RIGHT NOW. >> YES. THAT NEEDS TO OCCUR RIGHT NOW. >> LET ME JUST FORECAST AS WE GO TOWARDS, LIKE THE QAP. >> SURE. >> WHEN THEY'RE LOOKING AT THE APPLICATION AND THEY'RE CHECKING A BOX, CURRENTLY UNDER THE LAST ONE, THEY COULD CHECK USDA. [OVERLAPPING] >> YES. THEY COULD SELECT BOTH. YES. >> WHAT YOU'RE SAYING IS THAT IT WOULD BE USDA AND IT WOULD BE MORE LIKE WHAT'S CALLED RADIO BOMB. YOU CANNOT DO BOTH. YOU CAN PICK YOUR HORSE AT THE BEGINNING, AND THEN YOU GOT TO RIDE IT BECAUSE YOU CAN'T CHANGE YOUR SET ASIDE. >> RIGHT. BUT IF YOU ARE A USDA APPLICATION SUBMITTED IN THE USDA APPLICATION THAT QUALIFIES FOR AT RISK, AND YOU SUBMIT APPROPRIATE DOCUMENTATION, ONCE ALL THE AT RISK ARE FUNDED, IF WE HAVE MONEY LEFT OVER IN THAT 15%, THEN WE START LOOKING AT THOSE APPLICATIONS SUBMITTED IN THE USDA SET ASIDE THAT QUALIFY FOR AT RISK TO SEE IF ANY OF THEM ARE GOOD FOR AN AWARD. IS THAT WHAT YOU WERE PROPOSING? >> THAT'S HOW IT HAS BEEN DONE, IF THEY QUALIFY. >> IF THEY QUALIFY FOR AT RISK, THEY CHECK THE AT RISK BOX. THEY'RE CHECKING USDA SO THAT THEY GET THE QUALIFICATIONS OF USDA APPLICATIONS THROUGHOUT THE QAP. THERE IS A FUNNEL DOWN AND THERE ARE EXEMPTIONS FOR USDA APPLICATIONS. IF YOU'RE GOING TO SAY, PICK A HORSE, YOU'RE GOING TO HAVE TO LAY OUT SOMETHING AND AGAIN, IT'S GOING TO BE MORE CHANGE IN THE QAP LANGUAGE THAT YOU'RE GOING TO HAVE TO DO BECAUSE JUST PICKING A HORSE, IT'S NOT JUST TO CHECK THE BOX THING. I UNDERSTAND WHAT YOU'RE SAYING, MR. GAUSE. I'M NOT TRYING TO BE DISRESPECTFUL FOR YOU, BUT THAT FIRST LANGUAGE IS ELIMINATING A USDA APPLICATION OR A USDA-FINANCED APPLICATION FROM COMPETING LEGITIMATELY AS A QUALIFYING AT RISK DEVELOPMENT AND THAT'S WHAT I HAVE HEARTBURN OVER AND IT'S SPECIFICALLY LISTED IN THE DEFINITION. I DON'T HAVE A PROBLEM. IF YOU WANT THEM TO PICK A HORSE AND RIDE, PICK A HORSE AND RIDE. BUT THERE'S REASONS WHY THEY'RE CHECKING TWO BOXES BECAUSE THEY NEED TO CHECK THE USDA APPLICATION BECAUSE THERE ARE EXEMPTIONS THROUGHOUT THE QAP AND THE REAL ESTATE ANALYSIS RULES FOR THEM TO HAVE THAT USDA PART CHECKED. IF YOU WANT TO SAY PICK A HORSE, I'M WITH YOU, I HAVE NO PROBLEM WITH THAT. JUST DON'T ELIMINATE SOMETHING THAT THE STATUTE CLEARLY SAYS THEY QUALIFY FOR IF THEY PUT IN. THAT'S THAT'S MY ISSUE. I WOULD MUCH RATHER HAVE A CHANCE TO FIX IT IN LEGISLATION, WHICH WE HAVE THAT PRIORITY WITH RURAL RENTAL HOUSING. YOU HEARD FROM MR. [INAUDIBLE]. THAT IS ONE OF OUR PRIORITIES, SO I WOULD MUCH RATHER FIX IT IN STATUTE. WE'LL BE GLAD TO WORK WITH THE AGENCY ON THAT LANGUAGE AND HOW YOU SEE THAT? BUT I MEAN, THAT IS THE INTENT AND I WOULD MUCH RATHER FIX IT IN STATUTE THAN TRY TO DO THESE WORKAROUNDS AND PREDICT WHAT THE LEGISLATURE HAD IN MIND. THANK YOU. >> TRACY ROB, I APPRECIATE ALL OF YOUR INPUT COMMENTS. AT THIS POINT, I'D LIKE TO SEE US POST THE QAP LANGUAGE ALLOWING FOR THE MOST OPPORTUNITY FOR COMMENT AND ADJUSTMENT. >> SURE. >> WHATEVER VERSION OF THIS SAY WE CAN REACH SOME OF THAT LANGUAGE. WHERE THERE'S MOST OPPORTUNITY FOR COMMENT FOR TRACY'S CONCERNS AND THE RURAL GROUPS' CONCERNS RATHER THAN THIS POSTING LANGUAGE RIGHT NOW THAT ELIMINATES HIM THE OPPORTUNITY FOR. >> OF COURSE. >> COMMENT. GRANTED THAT EVEN WHEN THE COMMENT COMES IN, WE MAY END UP DELETING THIS LANGUAGE ANYHOW. BUT AT LEAST LEAVES THE OPPORTUNITY, DOESN'T CLOSE THE DOOR RIGHT NOW AND FIVE MONTH HEAR THIS IN NEXT 30 DAYS OR WHATEVER MONTHS IT TAKES. THEN AGAIN DOWN THE LINE FROM THE LEGISLATIVE SESSION, MAY WE ALL THAT THINGS CAN BE CLARIFIED. [03:30:03] WE CAN YOU ALL WORK WITH THAT? >> ABSOLUTELY. YES. IT WILL REQUIRE JUST A SLIGHT MODIFICATION THAT WE HAVE IN HERE TO CLARIFY THAT WHAT ROBBIE HAS ASKED FOR, WHICH IS PICKING A HORSE, WE'RE NOT GOING TO USE THAT EXACT LANGUAGE OBVIOUSLY IS THE INTENTION. THAT WOULD APPEAR TO BE THE MOST SATISFACTORY TO THE MOST NUMBER OF PEOPLE IN TERMS OF THE OPTIONS THAT WE HAVE IN FRONT OF US RIGHT NOW. CORRECT. >> FURTHER. [INAUDIBLE] IF SHE COULD DO ONE MORE, I WANT TO KNOW AHEAD OF TIME, WHAT WE'RE LOOKING AT. >> NO QUESTIONS. YOU SAID IT IN MULTIPLE OF WORDS. >> MR. MARSHALL, [INAUDIBLE] [LAUGHTER] IN DEVELOPING CASH APP THAT HAS BEEN MENTIONED, WHEN WOULD BE APPROPRIATE FOR THE THE COMMITTEE TO BEGIN TO EXAMINE THAT. AND WOULD BE THE EARLIEST OPPORTUNITY, THAT WOULD BE ANY ADJUSTMENT FOR THAT [INAUDIBLE]. [INAUDIBLE] WOULD BE THE 26 [OVERLAPPING]. >> [INAUDIBLE] TO BE AN EARLY TOPIC FOR THE DEVELOPMENT OF THE NEXT 26 [OVERLAPPING]. >> [INAUDIBLE]. I THINK IT'S FAIR TO THE COMMUNITY TO KNOW THAT WOULD BE A [INAUDIBLE]. >> YES. >> [INAUDIBLE] GETS A TOPIC FOR LEGISLATION UNLESS [INAUDIBLE]. OKAY. CAN WE WRAP THIS UP? >> WE SURE CAN, AND BELIEVE IT OR NOT, IT'S A PRETTY SHORT LIST. SO I'LL JUST SUMMARIZE REAL QUICK THE CHANGES THAT NEED TO BE MADE AS A RESULT OF THIS, BELIEVE IT OR NOT, THIS WENT WAY BETTER THAN I EXPECTED IT TO. FOR RENT LEVELS OF TENANTS, WE'RE GOING TO REVERT THE HIGHEST POINT OPTION TO BE AVAILABLE ONLY FOR SUPPORTIVE HOUSING DEVELOPMENTS. THAT WAS MY CLERICAL ERROR THAT I MADE IN THE QAP. FOR PROJECT 811, WE'RE GOING TO MOVE FROM TEN UNITS, IT'S A FLAT NUMBER TO 5% OF THE TOTAL UNITS. LOOKS LIKE WE MAYBE HAVE SOME ADDITIONAL COMMENT. FOR THE TIE BREAKER, WE'RE GOING TO CLARIFY THAT PARKS THAT REQUIRE AN ADMISSION ARE NOT ELIGIBLE. WE ARE GOING TO ADD TO THE QAP THAT IT IS SUBJECT TO CHANGE, IF ANY LEGISLATION PASSES THAT AFFECTS ANY PART OF IT. FOR SUPPORTIVE HOUSING, WE ARE GOING TO ADD A 30 SQUARE FOOT PER UNIT COMMON AREA REQUIREMENT. WE ARE GOING TO MAKE THESE SLIGHT CHANGES THAT BOTH FOUNDATION COMMUNITIES AND NEW HOPE HOUSING SUGGESTED. WE ARE GOING TO CHANGE THE LIMIT ON SUPPORTIVE HOUSING DEALS IN REGIONS 3 AND 6. WE'LL FIGURE OUT WHAT POPULATION THRESHOLD WE NEED TO FROM ONE TO UP TO TWO. FOR CHOICE NEIGHBORHOODS, FOR THE REPRESENTATIVES FROM BROWNSVILLE, WE'RE GOING TO LOWER THE THRESHOLD THERE TO 750,000. FOR TIE BREAKERS, WE ARE GOING TO ADD A DEFINITION OF QUASI GOVERNMENTAL ENTITIES. FOR LEVERAGING, WE'RE GOING TO CHANGE IT SO THAT THE 1% INCREASE IS ONLY AVAILABLE FOR DEVELOPMENTS SMALLER THAN 50 UNITS OR 50 UNITS OR SMALLER. QUANTITY OF LOW INCOME UNITS, WE'RE GOING TO HOLD WHERE IT IS AND SEE WHAT PUBLIC COMMENT IS. AND THEN FOR THE AT RISK LANGUAGE, WE ARE GOING TO CLARIFY THAT TO MAKE CLEAR THAT A USDA QUALIFYING APPLICATION CAN SELECT EITHER AT RISK OR USDA AND COMPETE IN EITHER, AND THAT IS >> YOU SAID LESS THAN 50 UNITS? >> 50 OR LESS. >> 50 OR LESS? >> YES. >> [INAUDIBLE]. >> IT'S NOT UP TO ME. >> THE STATUTE 4 AT RISK, IT DOES SEPARATE USDA. BUT THEN IT ALSO, THE [INAUDIBLE] ON ONE THIRD OF THE BUCKET. REST OF THE BUCKET, YOU HAVE TO BE ONE OF THESE OTHER THINGS. AND THEN IT SAYS, YOU HAVE TO HAVE HUD INSURED OR HUD HOLD DEBT ELIGIBLE FOR PREPAYMENT. USDA DEBT IS NOT HUD INSURED OR HUD HELD. IT IS USDA, IT IS NOT A QUALIFIER. THE OTHER THING THAT IT SAYS IS THAT YOU HAVE TO HAVE AN EXPIRING CONTRACT TO BE ELIGIBLE. THE USDA RENEWAL ASSISTANCE IS NOT AN EXPIRING CONTRACT. IT IS ANNUALLY RENEWED AUTOMATICALLY. SO IT DOES NOT MEET AUTOMATICALLY THE QUALIFIERS. LAST YEAR, THIS PAST ROUND, TWO DEALS WAS A USDA DEAL AND A Y15 [INAUDIBLE] DEAL. THEY MET THE REQUIREMENTS BECAUSE THEY WERE A Y15 DEAL, BUT NOT EVERY SINGLE USDA DEAL QUALIFIES FOR BOTH SET ASIDES. >> CODY, THAT WAS ADDRESSED [INAUDIBLE]. >> YES. [03:35:01] >> [INAUDIBLE] >> WELL, THEY WOULD HAVE TO QUALIFY. I THINK IT'S A GIVEN THAT YOU HAVE TO QUALIFY FOR WHAT YOU SUBMITTED. >> [INAUDIBLE] THE AT RISK DEFINITION REGARDING EXPIRY. >> YES. SO WE ADDED LANGUAGE THAT AN AUTOMATICALLY RENEWING CONTRACT IS NOT CONSIDERED TO BE NEARING EXPIRATION UNLESS IT'S PERMANENT EXPIRATION IS WITHIN THE NEXT TWO YEARS. >> [INAUDIBLE] >> I WAS LETTING ALL THE HORSES AND WHATEVER WAS HAPPENING UP HERE RESOLVE ITSELF BEFORE I CAME BACK DOWN. I'M [INAUDIBLE]. I AM THE POLICY SPECIALIST FOR THE HOUSING AND TRANSPORTATION TEAM AT DISABILITY RIGHTS, TEXAS. DISABILITY RIGHTS, TEXAS IS THE STATES FEDERALLY DESIGNATED PROTECTION ADVOCACY AGENCY. WE DO WORK ON BEHALF OF PEOPLE WITH DISABILITIES ENSURING THAT THEIR RIGHTS ARE PROTECTED AND THAT THEY CAN LIVE AS INDEPENDENTLY AS POSSIBLE IN THEIR COMMUNITIES. WE ARE ADVOCATES FOR LOW INCOME TEXANS. [OVERLAPPING]. >> [INAUDIBLE]. WHAT IS IT THAT YOU WANT TO CHANGE? >> WHAT DO I WANT TO CHANGE? >> ON THE QAP. THIS PART OF [INAUDIBLE] WE'RE TALKING ABOUT. I HAVE SOMETHING ON THE AGENDA REGARDING THE ALLOCATION PLAN. >> RIGHT. SO DO YOU JUST WANT ME TO TALK ABOUT CHANGES AS OPPOSED TO WHAT WE THINK ABOUT THE QAP? JUST CHANGES. >> REFERENCE THE QAP RATHER THAN, I'M SURE YOU HAVE A CLEAR PREPOSITION. WHAT DO YOU WANT TO ADDRESS THE QAP? >> I WOULD LIKE FOR STAFF TO ONCE AGAIN CONSIDER ADDING URGENT CARES AS A TIE BREAKER. THAT'S SOMETHING WE MENTIONED A COUPLE OF TIMES IN OUR COMMENTS. THERE ARE A LOT OF URGENT CARES ACROSS THE STATE AND URGENT CARES PROVIDE SPECIFIC SERVICES TO HELP PEOPLE WHO ARE FACING NOT AS SEVERE HEALTH CONCERNS AS OPPOSED TO HAVING TO PREVENT PEOPLE FROM HAVING TO GO TO HOSPITALS OR HAVING TO GO A LOT FURTHER AWAY FOR MEDICAL CARE, AND THAT'S SOMETHING THAT SPECIFICALLY IMPACTS PEOPLE WITH DISABILITIES. AND SO WE SUGGESTED ADDING URGENT CARE AS ANOTHER TIE BREAKER, BUT CONTINUING TO USE THE DISTANCE OF THE CLOSEST THREE OUT OF THE FIVE BECAUSE THAT WHOLE MENU OF TIE BREAKERS IS IMPORTANT TO PEOPLE WHO LIVE IN THESE COMPLEXES, IS IMPORTANT TO PEOPLE WITH DISABILITIES. THAT IS THE CHANGE I WANTED TO SUGGEST. >> THIS URGENT CARE CENTERS, IS THAT [INAUDIBLE] [OVERLAPPING]. >> I BELIEVE IT'S PART OF [OVERLAPPING]. >> IT'S IN OPPORTUNITY INDEX. YES. BUT IT'S NOT PART OF THE TIE BREAKER. RIGHT. [OVERLAPPING] TIE BREAKERS ARE ELEMENTARY SCHOOL, GROCERY STORE, PARK LIBRARY. >> [INAUDIBLE]. >> YES. SO YOU HAVE TO WE PICK THE BEST THREE OF THE FOUR FOR THE TIE BREAKER. >> HOSPITALS ARE ON THEIR OWN [INAUDIBLE]. >> AND WE WANTED TO SPECIFY URGENT CARE BECAUSE HOSPITALS DON'T SERVE THE SAME PURPOSE BECAUSE WE'RE TRYING TO HELP PEOPLE WITH MINOR HEALTH PROBLEMS AND HOSPITALS CAN BE A LOT FURTHER AWAY THAN URGENT CARES ARE. DEPENDING ON WHERE YOU ARE, BUT THERE ARE MORE URGENT CARES IN A LOT OF AREAS THAN THERE ARE HOSPITALS. >> IS THIS SOMETHING THAT WOULD JUMP STRAIGHT TO A LEVEL OF A TIE BREAKER LEVEL THAN THE NEARBY AMENITIES LEVEL SCORING [INAUDIBLE]? >> SURE. SO IT IS A [OVERLAPPING]. >> I DON'T THINK IT'S A BAD IDEA. I JUST FIRST I'VE HEARD ANYONE MENTION THIS [INAUDIBLE]. >> [INAUDIBLE]. >> [LAUGHTER] YEAH. >> [INAUDIBLE]. >> LIKE THE CHOICES YOU HAD >> IT IS POSSIBLE THAT THE TIE BREAKER COULD GET UNWIELDY IF WE HAD TOO MANY OPTIONS. I DO THINK FIVE IS MANAGEABLE. THE OTHER CONCERN IS THAT IF WE ADD TOO MUCH TO THE TIE BREAKER, WE HAVE IN EFFECT JUST RECREATED THE OPPORTUNITY INDEX, WHICH IS A PRETTY MAJOR POINT CATEGORY THAT AWARDS YOU FOR BEING CLOSE TO AMENITIES. IF THE BOARD WANTED TO ADD URGENT CARES, THOSE STAFF COULD CERTAINLY MANAGE IT. THIS WOULD NOT BE ADMINISTRATIVELY BURDENSOME AT FIVE. >> [INAUDIBLE] OPPORTUNITY INDEX ALTHOUGH. >> HEALTHCARE IS PART OF THE ARRAY [OVERLAPPING]. >> IS THIS SOMETHING HAVE YOU WRITTEN COMMENTS AT [INAUDIBLE]? IF I'M ASSUMING THAT WE HAVE LOOKED AT IT, STAFF HAS LOOKED AT IT IN THE PAST [INAUDIBLE] IMPORTANT AS A TIE BREAKER. >> I THINK IF YOU WANTED TO PUT IT OUT TO COMMENT, IT SHOULD BE ADDED TO THE PROPOSED RULE AS OPPOSED TO RECEIVING IT FROM ONE AND STICKING IT TO THE TIE BREAKER. >> DO ANY OTHER INDUSTRY REPRESENTATIVES HAVE A FOLLOW ON THIS? [03:40:04] >> [INAUDIBLE]. >> OKAY, THANK YOU FOR THAT. >> TAP WOULD NOT BE OPPOSED TO SOMETHING LIKE THIS IF WE COULD TALK ABOUT IT FOR 26. I FEEL LIKE WE'VE ALREADY STARTED LOOKING FOR OUR SITES BASED ON THE CURRENT CONSTRUCT OF THE TIE BREAK, AND THAT IS A PRETTY SIGNIFICANT DIFFERENCE IN, IT'S ANOTHER PLACE THAT WE HAVE TO GO LOOK AND CHECK OUR SITES AGAINST. SO THAT WOULD BE TAPS POSITION IS THAT WE COULD SUPPORT SOMETHING LIKE THAT FOR 26, BUT NOT TODAY. >> OKAY. AND WHEN WE TALK ABOUT MAKING THREE OF SIX? >> IT WOULD BE [OVERLAPPING]. >> WELL RIGHT NOW IT'S THREE OF FOUR. >> FOUR. >> SO WE'RE SAYING [INAUDIBLE] [NOISE] THE PROPOSAL OR THE QUESTION WOULD BE MAKING THREE TO FIVE? >> YES. >> I [INAUDIBLE] ON SIX BECAUSE THERE'S CONSIDERABLE DISAGREEMENT AMONG THE HEALTH COMMUNITY AS TO THE VIABILITY OF URGENT CARE CENTERS, WHAT YOU ACTUALLY WANT TO SEND SOMEONE THERE BECAUSE OF FINANCIAL ISSUES, ET CETERA. IN 26 WE GIVE US A LOT OF TIME TO DISCUSS THAT TO MAKE SURE WE PUT THAT WORD IN THERE. >> IN DEFINITION OF [INAUDIBLE]. >> I SPOKE ONCE. THAT'S ENOUGH FOR ME. [LAUGHTER] >> [INAUDIBLE]. >> OKAY. DOES ANYONE ELSE HAVE ANYTHING THAT THEY WANT US SOMETHING NEW THAT IS RELEVANT TO THIS? >> GOOD AFTERNOON. MY NAME IS ERIN HAN. I'M A RESEARCH ANALYST WITH TEXAS HOUSERS. STATEWIDE NON PROFIT THAT SUPPORTS LOW INCOME TEXANS EFFORTS TO ACHIEVE THE DREAM OF A DECENT AFFORDABLE HOME AND A QUALITY NEIGHBORHOOD OF THEIR CHOICE. I JUST HAVE A COUPLE COMMENTS ON SOME ELEMENTS OF THE QAP THAT WARRANT TO MENTION IN CODY'S PRESENTATION. BUT FIRST, WE APPLAUD [INAUDIBLE] FOR THE INCLUSION OF EVICTION PREVENTION PROGRAM AS A RESIDENT SUPPORTIVE SERVICE, AND FOR AWARDING FIVE POINTS TO APPLICATIONS OF LANDLORDS WHO AGREED TO HOLD OFF ON EVICTION FOR SIX MONTHS WHILE TENANTS WORK WITH A CASEWORKER TO RESOLVE THEIR PAST DUE BALANCE. BY INCENTIVIZING GUARD RULES AGAINST EVICTION, THIS NEW POINT ITEM WILL HAVE A SIGNIFICANT IMPACT IN TERMS OF PRESERVING THE HOUSING STABILITY OF LOW INCOME TENANTS WHO LIVE IN LIGHT TECH PROPERTIES, WHERE THE LANDLORD OPTS TO PROVIDE THE SERVICE, PREVENTING [INAUDIBLE] EVICTIONS AND PROTECTING TENANTS FROM THE WELL DOCUMENTED HARMS OF EVICTION. WE RECOMMEND TDHD TO MAKE THE FOLLOWING MINOR ADJUSTMENTS TO THE POLICY. ONE REQUIRE THAT DURING THE SIX MONTH HOLD OFF PERIOD, THE RENT AMOUNT WILL NOT BE INCREASED, AND TWO CLARIFY THAT NO ADDITIONAL LATE FEES WILL BE CHARGED DURING THIS PERIOD. SECONDLY, WE EXPRESS OUR SUPPORT FOR THE CHANGE TO THE UNDERSERVED AREAS THAT OFFERS FIVE POINTS TO DEVELOPMENTS IN UNDERSERVED AREAS THAT ARE LOCATED WITHIN A CENSUS TRACT WITH A HIGH MEDIAN INCOME. THIS WILL HAVE THE EFFECT OF FURTHER INCENTIVIZING DEVELOPMENTS THAT ARE LOCATED IN HIGH OPPORTUNITY AREAS WHERE TENANTS HAVE ACCESS TO JOBS, HIGH QUALITY SCHOOLS, TRANSPORTATION, AND OTHER INTEGRAL RESOURCES AND SERVICES. IN REGARDS TO POINTS FOR PROXIMITY TO JOBS, TEXAS HOUSERS STRONGLY SUPPORTS THE ADDITION OF LANGUAGE TO ENSURE THAT PROPERTIES DO NOT GET CREDIT FOR PROXIMITY TO PUBLIC TRANSIT WITHOUT BEING FULLY ACCESSIBLE TO ANYONE WHO NEEDS IT. WE ARE ALSO CONCERNED THAT THE DISTANCE BETWEEN THE DEVELOPMENT AND JOBS IS NEEDED FOR POINTS MORE THAN DOUBLED FOR APPLICATIONS IN URBAN AREAS. WE RECOMMEND A SMALLER INCREASE IF THE INCREASE IS NECESSARY. FINALLY, WE SUPPORT THE ADDITION OF AN INCENTIVE FOR MORE 811 UNITS FOR TENANTS WITH DISABILITIES AND 9% TAX CREDIT PROPERTIES, AND WE ALSO DO SUPPORT ADDING URGENT CARE CENTERS AS A TIE BREAKER. THANK YOU. >> [INAUDIBLE] I THINK A LOT OF THOSE WE TOUCHED ON RIGHT THEN. LET'S JUST ENCOURAGE CONTINUED [INAUDIBLE]. >> THERE IS ONE OTHER CHANGE THAT, AND THANK YOU, KATHERINE FOR REMINDING ME THERE IS UNDER THE RENT LEVELS, I'M SORRY, THE QUANTITY OF LOW INCOME UNITS. THERE IS THAT 50% INCREASING THE AVERAGE FOR 50%. MY RECOMMENDATION WAS TO RESTORE THAT SO THAT IT'S ONLY AVAILABLE FOR REHABILITATION DEVELOPMENTS, BRINGING NEW UNITS INTO THE PROGRAM. WE TOUCHED ON THAT A LITTLE BIT AT THE BEGINNING. [NOISE] >> OKAY. I'D LIKE TO CONTAIN A MOTION TO ACCEPT THE QAP PUBLICATION AS DISCUSSED AND AMENDED IN THIS COMMUNITY. >> SURE. >> [INAUDIBLE] MOTION [INAUDIBLE]. AS WE DISCUSSED THE LAST TWO HOURS. [03:45:01] >> [INAUDIBLE] >> I'M SORRY [OVERLAPPING] [INAUDIBLE].. YOU CAN WRITE A WRITTEN COMMENT, AND WE APPRECIATE YOUR INPUT AND YOUR >> I SECOND THE MOTION. >> OKAY. SO THE MOTION [INAUDIBLE] MR. SCHMITT, MR. HARPER MADE THE MOTION TO APPROVE THE REPEAL OF [INAUDIBLE] CHAPTER 11 AND THE NEW PROPOSED AS DISCUSSED [INAUDIBLE] CHAPTER 11. AS SOON AS DESCRIBED THE CONDITION IN THE BOARD ACTION REQUEST FOR RESOLUTION THAT ASSOCIATE THE DOCUMENTS INSIDE. YES. OKAY. >> [INAUDIBLE]. >> [INAUDIBLE] BY HARPER, SECONDED BY MARSHALL. ALL THOSE IN FAVOR, SAY AYE. >> AYE. >> ANY OPPOSED HEARING NONE, MOTION CARRIES. OKAY. WE ARE GETTING NOW TO THE PORTION OF THE MEETING THAT A LOT OF THESE ITEMS ARE FORCE MAJEURE TYPE OF REQUESTS. >> I THINK, MR. [INAUDIBLE], YOU'RE GOING TO [INAUDIBLE] BEFORE HERE IN A MINUTE. NECESSITY. WE HAVE A SMALL RIGHT. >> LET'S HAVE A SHORT [LAUGHTER] IT'S A TEN MINUTE BREAK, SO LET'S START BEFORE AT 2:00. [LAUGHTER]. >> ONE UP HERE. >> I THINK [INAUDIBLE]. [NOISE] OKAY. IT'S 2:00. I'M GOING TO RECONVENE. NOTE THAT MS. CONROY ISN'T BACK YET, BUT WE HAVE A QUORUM, SO WE'RE GOING TO CONTINUE. >> SHE WILL NOT BE BACK. >> [INAUDIBLE]. >> SHE LEFT AT 1:45. SHE WILL NOT BE RETURNING. >> SHE LEFT AT 1:45. SHE'S NOT RETURNED. >> [INAUDIBLE] [LAUGHTER]. >> OKAY. [INAUDIBLE] 24. >> CORRECT. >> ITEM 24 OF THE AGENDA, PRESENTATION, DISCUSSION OF THE POSSIBLE ACTION REGARDING A WORKOUT FOR HERITAGE HEIGHTS AT ABILENE. MR. CAMPBELL. >> THANK YOU, MR. VASQUEZ. THIS ITEM IS NOT ABOUT THE QAP. IT IS, AS YOU JUST SAID, ABOUT A WORKOUT AGREEMENT FOR HERITAGE HEIGHTS AT ABILENE. THE BOARD DOESN'T HEAR TOO MANY WORKOUTS, BUT THIS IS WHAT WE DO WHEN A FINANCIALLY DISTRESSED DEVELOPMENT REQUESTS CHANGES TO THE TERMS OF A DEPARTMENT LOAN IN ORDER TO GAIN RELIEF AND ACHIEVE STABILIZATION. HERITAGE HEIGHTS IS A 48-UNIT DEVELOPMENT THAT SERVES THE ELDERLY POPULATION OF ABILENE. THE PROJECT INITIALLY RECEIVED AN AWARD OF 9% HOUSING TAX CREDITS AND A LOAN OF 1.5 MILLION IN NATIONAL HOUSING TRUST FUND, OR NHTF, THAT WAS STRUCTURED AS SOFT REPAYABLE WITH NO INTEREST AND NO ASSUMED ANNUAL DEBT PAYMENT. IT ALSO INCLUDED A TWO MILLION DOLLAR LOAN FROM CEDAR RAPIDS BANK & TRUST. SEVERAL MONTHS AGO, THE DEVELOPER CONTACTED THE DEPARTMENT TO DISCUSS THE POSSIBILITY OF A WORKOUT ARRANGEMENT AS INCREASED CONSTRUCTION COST HAD SIGNIFICANTLY IMPACTED THE DEVELOPMENT. BECAUSE COSTS WERE SO HIGH, THE CEDAR RAPIDS LOAN HAD TO BE INCREASED, AND IN ORDER TO MAINTAIN FEASIBILITY, THE TOTAL DEVELOPER FEE WAS REDUCED BY $564,000 OR ABOUT 48%. IN ORDER JUST TO KEEP THIS THING GOING, THEY CUT THEIR DEVELOPER FEE IN HALF AND INCREASED THE PERMANENT DEBT. IN ORDER TO ENSURE LONG-TERM FINANCIAL STABILIZATION, THIS WORKOUT PROPOSES INCREASING THE EXISTING NHTF LOAN FROM 1.5 TO 3.44 MILLION. THIS INCREASED LOAN AMOUNT WILL ALLOW FOR THE PAYOFF OF THE CEDAR RAPIDS LOAN, WHICH CARRIES AN INTEREST RATE OF APPROXIMATELY 5%. WE PROPOSE THAT OUR INCREASED LOAN BE FULLY REPAYABLE AT 0.75% INTEREST, WHICH THE DEVELOPMENT CAN SUPPORT. WHILE DEVELOPMENTS ARE TYPICALLY ELIGIBLE TO REQUEST A WORKOUT, IT IS HIGHLY UNUSUAL FOR THE DEPARTMENT TO HAVE THIS MUCH IN AVAILABLE FUNDING FOR THAT PURPOSE. THE DEPARTMENT RECEIVES GRANTS OF NHTF ANNUALLY FROM HUD. THESE FUNDS ARE AWARDED THROUGH A COMPETITIVE APPLICATION PROCESS. EACH GRANT OF NHTF INCLUDES A SPECIFIC DEADLINE BY WHICH THE FUNDS MUST BE COMMITTED AND THEN EXPENDED. THE DEPARTMENT HAS A COMMITMENT DEADLINE ON SEPTEMBER 14, 2024, AND DUE TO TWO RECENT APPLICATION WITHDRAWALS, IS AT RISK OF NOT MEETING THIS DEADLINE. FEDERAL REGULATIONS ALLOW FOR THE DEPARTMENT TO COMMIT ADDITIONAL NHTF TO A PROJECT WITHIN ONE YEAR OF ITS PROJECT COMPLETION, WHICH CAN BE ACCOMPLISHED SUBSTANTIALLY FASTER THAN COMMITTING FUNDS TO ENTIRELY NEW PROJECTS. BECAUSE OF THIS, THIS WORKOUT IS A GREAT OPPORTUNITY FOR US TO MEET OUR FEDERAL DEADLINE. IN ADDITION TO THE STABILIZATION OF THE PROJECT AND THE DEPARTMENT MEETING ITS COMMITMENT DEADLINE, THERE IS ANOTHER SIGNIFICANT BENEFIT TO THE BOARD APPROVING THIS ITEM. NHTF-FUNDED UNITS ARE RESTRICTED FOR EXTREMELY LOW INCOME HOUSEHOLDS WITH INCOME AND RENT LEVELS THAT ARE GENERALLY ABOUT 30% OF AREA MEDIAN INCOME. IN ABILENE, THE RENT LIMIT FOR A ONE-BEDROOM UNIT AT THIS LEVEL IS ABOUT $450, [03:50:04] AND A TWO-BEDROOM IS ABOUT $650. THIS DEVELOPMENT WAS INITIALLY REQUIRED TO PROVIDE EIGHT OF THESE UNITS, BUT WITH THE INCREASED LOAN AMOUNT, THAT NUMBER WILL GO UP TO 20, MEANING THAT AN ADDITIONAL 12 EXTREMELY LOW INCOME ELDERLY HOUSEHOLDS WILL BE AFFORDED HOUSING STABILITY WITH THESE FUNDS. STAFF RECOMMENDS THAT THE BOARD APPROVE THIS WORKOUT, AND I'M HAPPY TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE. >> IN SUMMARY, WE HAVE SOME BUZZ. >> EXACTLY. >> IT HAPPENS THAT THERE'S AN ALREADY APPROVED PROJECT THAT WE CAN APPLY THOSE FUNDS TO. >> THAT IS CORRECT. >> WE WILL GET AN ADDITIONAL. >> 30% UNITS. YES, SIR. >> EXTREMELY LOW INCOME. >> YES, SIR. IT'S ALREADY BUILT. THERE'S NO CONSTRUCTION DELAYS. THEY'RE ON THE GROUND, THEY'RE HUMMING. >> IT SOUNDS LIKE A REASONABLE TRADE OFF. >> SURE. >> DO ANY BOARD MEMBERS HAVE QUESTIONS ON THIS ITEM? >> MR. CHAIRMAN. >> WAIT A MINUTE. >> A VERY QUICK QUESTION. DOES THE DEVELOPER IN THIS CASE AND THE OWNERS WHO ARE APPARENTLY GETTING THIS CONFUSION, DOES THAT DISQUALIFY THEM IN ANY WAY FROM PARTICIPATING IN THE FUTURE OR? >> NO, SIR. NO, THIS DOESN'T CARRY A RECOMMENDATION WITH A PENALTY. >> OKAY. IS THIS A FAILED DEVELOPMENT OF CIRCUMSTANCES, OR MISMANAGEMENT, OR WHAT ARE THE CIRCUMSTANCES? >> SURE. MY IMPRESSION IS NOT THAT IT IS MISMANAGEMENT. THIS IS A VERY EXPERIENCED DEVELOPER WHO'S DONE MANY PROJECTS WITH US. IT WAS THE INCREASED CONSTRUCTION COSTS THAT REQUIRED THEM TO PUT QUITE A BIT OF ADDITIONAL MONEY INTO THE DEVELOPMENT, CUT THEIR DEVELOPER FEE IN HALF, AND BECAUSE IT'S SUCH A SMALL DEAL IN SUCH A SMALL RURAL AREA WITH LOW RENTS, THERE'S NOT A WHOLE LOT OF CUSHION TO ABSORB THOSE EXTRA COSTS. I BELIEVE THAT IF THE BOARD DIDN'T APPROVE THIS, THAT THIS IS NOT NECESSARILY A RISK OF GOING INTO FORECLOSURE, IT IS FINANCIALLY STRAINED. IT IS POSSIBLE THAT IF YOU DIDN'T APPROVE IT, THEY MIGHT STILL HAVE TO COME BACK WITHIN THE NEXT COUPLE OF YEARS AND REQUEST A DIFFERENT KIND OF WORKOUT. BUT MY IMPRESSION, AND WE'VE WORKED CLOSELY WITH THEM OVER THE LAST COUPLE OF MONTHS, IS NOT THAT THIS IS THE RESULT OF INCOMPETENCE. >> OKAY. >> SURE. >> DO YOU KNOW WHAT THE DCR IS WITHOUT THIS CHANGE IN FINANCING? >> I KNOW THAT WITH THE CHANGE, THE DCR IS PRETTY COMFORTABLE. GOSH, I AM GOING TO HAVE TO. >> WHAT ABOUT THE EXISTING DCR? >> WHEN WE INITIALLY UNDERWROTE IT, IT WOULD HAVE HAD TO HAVE BEEN AT LEAST A 1.15. I'M SO SORRY, MR. HARPER. I ACTUALLY DON'T HAVE THAT INFORMATION ON HAND. YEAH. >> THERE'S NOTHING TO DO WITH THIS BOND BECAUSE THE DEVELOPER COMES IN, THEY TAKE RISK DEVELOPER. AND NOW YOU'RE COMING TO SAY, I WANT TO TAKE MY 5% LOAN AND CHANGE IT TO A OR 4% LOAN. THAT'S ABNORMALITY. >> OF COURSE. WE, LIKE I SAID, HAD TWO APPLICATIONS FOR WITHDRAWAL RECENTLY. WE DID HAVE A BACKUP. AFTER THE FIRST WITHDREW DUE TO TIMING ISSUES, WE SAID, WE STILL GOT THIS ONE IN BROWNSVILLE. THIS IS OUR SAFETY. THEN THE CITY OF BROWNSVILLE PULLED SUPPORT FOR THAT DEVELOPMENT, AND THIS IS WITHIN MONTHS OF OUR COMMITMENT DEADLINE. UNFORTUNATELY, THE TIMING IS SO TIGHT THAT THERE'S JUST NOT ANYTHING ELSE THAT WE CAN REALISTICALLY DO WITH THE FUNDS. >> THANK YOU, SIR. >> OF COURSE. >> GREAT QUESTIONS BY BOTH MR. MARCHANT AND MR. HARPER. IF THERE'S NO FURTHER QUESTIONS OR DISCUSSION, I'LL ENTERTAIN A MOTION ON ITEM 24 OF THE AGENDA. >> MR. CHAIRMAN, I MOVE THE BOARD APPROVED THE WORKOUT AGREEMENT FOR HERITAGE HEIGHTS AT ABILENE. ALL IS DESCRIBED IN CONDITION OF THE REQUEST, RESOLUTIONS AND SUBS. >> THANK YOU FOR THE MOTION, MRS. FARIAS. IS THERE A SECOND? >> SECOND, MR. CHAIRMAN. >> SECONDED BY MR. THOMAS. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSED? MOTION CARRIES. WE'RE HANDING OVER THE LAPEL, MIKE. >> HANDING OVER THE LAPEL. >> NOW WE ARE GETTING TO A SECTION I THINK THE REST OF THIS FORCE MAJEURE, IS THIS CORRECT? THE AGENDA. >> YES. >> I'D LIKE EVERYONE TO JUST GIVE BRIEF BACKGROUND AS WE USUALLY DO. KEY ITEMS FOR EVERYONE TO ADDRESS OR PRESENT TO US IS WHETHER YOU HAVE [03:55:07] SPECIFIC HARD DATES CERTAIN ON WHATEVER THAT NEXT STEP IS IN YOUR PROCESS, CLOSING OR COMPLETION OR WHATEVER THAT IS. THAT IS GOING TO BE A KEY FACTOR THAT I THINK THE BOARD WANTS TO HEAR FOR THESE ITEMS. I HAVE 25 PRESENTATION AND DISCUSSION OF POSSIBLE ACTION ON A REQUEST FOR RETURN AND REALLOCATION OF TAX CREDITS OF SECTION 11.65 RELATING TO CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR THE VICTORIAN. MR. GOLDBERG. >> GOOD AFTERNOON, CHAIRMAN VASQUEZ, MEMBERS OF THE BOARD. JOSH GOLDBERGER, COMPETITIVE HOUSING TAX CREDIT MANAGER AT TDHCA. I'M HERE BEFORE YOU TO DISCUSS A REQUEST TO RETURN AND BE REALLOCATED CREDITS UNDER THE DEPARTMENT'S FORCE MAJEURE RULE. SINCE THIS IS THE SECOND OUT OF 11 REQUESTS BEFORE YOU TODAY, I'LL SPARE THE USUAL SPIEL AND GET INTO THE DETAILS HERE. ITEM 25 CONCERNS THE VICTORIAN, 68-UNIT DEVELOPMENT IN VICTORIA THAT RECEIVED ITS AWARD OF HOUSING TAX CREDITS IN 2023. LIKE MANY RECENT AWARDS, THE PROJECT WAS IMPACTED BY COST INCREASES AND MULTIPLE INTEREST RATE HIKES THAT CREATE A CONSIDERABLE FUNDING GAP. AS A PROJECT IN THE COASTAL BEND, SKY ROCKETING INSURANCE PREMIUMS WERE PARTICULARLY IMPACTFUL IN THIS CASE. ULTIMATELY, THE APPLICANT HAS ADDRESSED THIS GAP WITH 500,000 IN SOFT FINANCING FROM THE CITY OF VICTORIA. WHILE THIS HAS ENSURED THE PROJECT COULD REMAIN FEASIBLE, SECURING THIS LOAN TOOK SOME TIME. THE FINANCING WAS APPROVED BY THE CITY HFC IN MARCH AND LOAN DOCUMENTS WERE EXECUTED IN JULY. THE PROJECT NOW EXPECTS TO CLOSE AND START CONSTRUCTION IN NOVEMBER WITH AN EXPECTED 16-MONTH CONSTRUCTION TIMELINE, COMPLETING IN MARCH OF 2026, THREE MONTHS PAST THE CURRENT PLACED IN-SERVICE DEADLINE. THIS IS QUITE SIMILAR TO SOME OTHER REQUESTS WE HAVE SEEN THIS YEAR. FORCE MAJEURE EVENTS CREATED A GAP, AND WHILE THE APPLICANT HAS FOUND A WAY TO ADDRESS IT, THAT PROCESS HAS PUT THE PLACED IN-SERVICE DATE IN JEOPARDY. STAFF RECOMMENDS APPROVAL. I'M AVAILABLE FOR ANY QUESTIONS AND REPRESENTATIVES OF THE DEVELOPMENT ARE ALSO PRESENT. >> WELL, FINANCE IS NOW IN PLACE? >> YES, WE HAVE A LETTER FROM THE CITY OF VICTORIA THAT ATTESTS TO THAT FACT. >> OKAY. DO WE HAVE CONTRACTORS ON BOARD? >> I'LL DEFER TO THE APPLICANT FOR THOSE SPECIFICS. >> IS ANYONE? INTRODUCE YOURSELF AND MAKE SURE TO SIGN IN AFTER YOU DO THE PRESENTATION. >> RICK DEYOE, PRESIDENT REALTEX DEVELOPMENT CORPORATION. TO ADDRESS THE IMMEDIATE QUESTION, WE HAD DIFFICULTY WITH THE FOUR INTEREST RATE BUMPS THAT OCCURRED IN 2023, AND SO OUR LOAN AMOUNT KEPT GETTING LOWER AND LOWER. THEN, OF COURSE, WHEN THEY GOT THEIR APPRAISAL DONE, THE OPERATING EXPENSES HAD GONE THROUGH THE ROOF, SO TO SPEAK, PRIMARILY BECAUSE OF INSURANCE PREMIUMS INCREASES, AND VICTORIA, AS YOU KNOW, ALONG THE COASTAL BEND. >> MR. DEYOE, LET'S NOT DWELL ON HOW WE GOT HERE. >> YES, WE DO. WE HAVE COMPLETED THE PLAN. WE WE INTENDED TO MOVE FORWARD JUST AS WE ALWAYS HAVE ON DEALS AND KICKED OFF THE ARCHITECTURE, THE ENGINEERING. ALL OF OUR PLANS ARE DONE. THE CONTRACTOR BID THE JOB THE SAME UNIT PLANS THAT WE ALSO JUST BUILT LAST YEAR. HE'S VERY FAMILIAR WITH THE PLANS, SAME CONTRACTOR, DID A GOOD JOB LAST YEAR. WE DIDN'T COME BACK TO YOU FOR ANYTHING ON THAT ONE. BUT THE CONSTRUCTION COSTS WERE A LOT HIGHER THAN THEY WERE FOR THE SAME PLANS A YEAR LATER, AND SO WE'RE GOING BACK, WE'RE VALUE ENGINEERING THE PLANS, WE GOT THAT DONE, THAT TOOK US A LITTLE BIT LONGER. THE CITY OF VICTORIA TOOK A WHILE AND THEN GETTING THE CITY LOAN DONE BECAUSE THEY HAD TO GET IT FROM THE SALES TAX GROUP TO THE HOUSING FINANCE CORPORATION TO BE ABLE TO LOAN IT TO THE PROJECT, SO IT WOULDN'T COME IN AS A GRANT. IT TOOK SOME TIME TO GET THE PIECES OF THE PUZZLE TOGETHER. WE'VE NOW GOT ALL OF THE PIECES OF THE PUZZLE TOGETHER. WE'RE SCHEDULED TO CLOSE NOVEMBER BEFORE THE END OF THE YEAR FOR CERTAIN, AND GET STARTED, AND I'LL TAKE US 14-16 MONTHS TO BUILD IT. WHAT'S THAT? >> IS YOUR DRAWINGS DONE AND SEALED? >> YES. >> YOUR GMP YOUR CONTRACTOR, DO YOU HAVE YOUR PRICE COMPLETED? >> THEY'RE STILL WORKING THROUGH SOME VE STUFF ON THE PLANS, BUT WE HAD THE PLANS COMPLETED. THEY'VE ALREADY BEEN TO THE CITY. THE CITY IS OUR PARTNER ON ANOTHER PROJECT IN VICTORIA. [04:00:01] AND SO THEY'RE GOING TO RUSH THE PLANS. WE'LL HAVE THE FINAL DRAWINGS READY AND SEALED BEFORE WE CLOSE IN NOVEMBER. >> CITY PERMITS IN PLACE OR NOT IN PLACE? >> THE CITY IS READY TO GIVE US PERMITS AS SOON AS WE GET ALL THESE APPROVALS. >> I GUESS WE'RE JUST LOOKING FOR SOME CONFIDENCE ON THE ACTUAL START DATE. >> WE WILL BE STARTING CONSTRUCTION BEFORE THE END OF THE YEAR. WE WILL BE FINISHING CONSTRUCTION FIRST QUARTER OF 2026. >> IS THERE ANY FURTHER QUESTIONS ON THIS END? I'LL ENTERTAIN A MOTION. >> I MOVE THE BOARD GRANTS THE REQUEST FOR TRADING OUT THE APPLICATION OF FORCE MAJEURE RULE TO VICTORIA AS DESCRIBED CONDITION AUTHORIZED THE BOARD ACTION REQUEST, RESOLUTION, AND ASSOCIATED DOCUMENTS. >> SECOND. >> MOTION MOVED BY MR. HARPER. SECONDED BY MRS. FARIAS. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSED? HEARING NONE, THE MOTION CARRIES. WE'RE GOING TO ITEM 26, PRESENTATION AND DISCUSSION OF THE POSSIBLE ACTION ON THE REQUEST FOR RETURN AND REALLOCATION OF TAX CREDITS UNDER TEN TAX SECTION 11.65, CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR THE CABANA DESIGN DISTRICT. BOY, THAT SOUNDS REMARKABLE. >> OUR NEXT REQUEST CONCERNS CABANA DESIGN DISTRICT, A DEVELOPMENT IN DALLAS THAT RECEIVED ITS ALLOCATION OF HOUSING TAX CREDITS IN 2023. THE PROJECT PROPOSES THE ADAPTIVE REUSE OF THE VACANT CABANA HOTEL INTO A 175-UNIT MIXED INCOME DEVELOPMENT. THE BOARD MAY RECALL THAT THIS APPLICANT WAS HERE FOR A MATERIAL AMENDMENT IN EARLY JULY THAT ALTERED THE PROPOSED DESIGN OF THE PROJECT AND ACTUALLY INCREASED THE NUMBER OF PROPOSED UNITS. IN ADDITION TO DELAY STEMMING FROM THAT REDESIGN, THIS PROJECT IS KIND OF IN LIMBO DUE TO A DISPUTE BETWEEN THE CITY OF DALLAS AND THE TEXAS DEPARTMENT OF TRANSPORTATION. THE DEVELOPMENT IS LOCATED ON STEMMONS FREEWAY, AND THE TWO ENTITIES ARE HAVING DIFFICULTY CONFIGURING THE ENTRANCES AND EXITS ON THE FRONTAGE. GIVEN THAT THESE HAVE BEEN IN PLACE FOR SEVERAL DECADES, THE APPLICANT EXPECTED THAT THEY WOULD BE ABLE TO SIMPLY KEEP THESE ACCESS POINTS THE SAME IN ORDER TO EXPEDITE THE PROCESS. THIS HAS PROVED NOT TO BE THE CASE. UNFORTUNATELY, THIS IS THE KIND OF SITUATION THAT WILL DELAY THIS PROJECT PERPETUALLY UNTIL IT IS RESOLVED. WITHOUT A SOLUTION, THE APPLICANT CANNOT MOVE THEIR CIVIL SITE PLANS FORWARD TO RECEIVE BUILDING PERMITS. IN ADDITION TO THIS SITUATION, THE PROJECT HAS ALSO FACED DELAYS DUE TO THE HISTORIC NATURE OF THE PROPERTY. THE NATIONAL PARK SERVICE REVIEW OF THE PROJECT WAS DELAYED BEYOND A TYPICAL TIMELINE AND RESULTED IN SOME UNEXPECTED CONDITIONS AND ADDITIONAL DESIGN REVISIONS. THIS IS UNFORTUNATELY THE KIND OF SITUATION THAT DOES NOT HAVE AS FIRM OF A TIMELINE AS SOME OTHERS. BUT NONETHELESS, IT DOES SEEM THAT THIS WAS UNANTICIPATED. STAFF RECOMMENDS APPROVAL AND REPRESENTATIVES OF THE DEVELOPMENT ARE PRESENT FOR ANY SPECIFIC QUESTIONS. >> MR. CAMPBELL? >> ZACHARY KROCHTENGEL, SYCAMORE STRATEGIES. WE HAVE A FREDDY COMMITMENT THAT'S DUE TO EXPIRE ON THE 27TH OF THIS MONTH, SO WE WILL BE CLOSING REGARDLESS OF WHETHER WE HAVE PERMITS OR NOT. WE HAVE DEMOLITION PERMIT, SO WE HAVE A COUPLE MONTHS OF WORK THAT WE CAN DO ON A DEMOLITION PERMIT WHILE WE'RE WAITING FOR TXDOT TO RESOLVE, AND WE'VE GOTTEN OUR DEBT AND EQUITY TO ALL AGREE TO CLOSE ON DEMOLITION PERMITS. BUT WITH THIS DELAY, THERE IS OBVIOUSLY SOME WORRY THAT WE JUST DON'T HAVE AN END IN SIGHT. WE'VE BEEN DEALING WITH TXDOT SINCE APRIL ON THE SAME ISSUE BASED ON OUR DESIRE TO KEEP THE ENTRANCES THE SAME AS THEY HAVE BEEN SINCE 1965, AND THERE'S NOT REALLY THAT MANY OTHER OPTIONS TO CHANGE THOSE ENTRANCES. WE'VE BEEN WORKING OUR WAY THROUGH THAT. EVERY TIME WE COME TO AN AGREEMENT WITH ONE PARTY, ANOTHER PARTY OBJECTS. IT'S HAVING TO GET TXDOT, THE CITY OF DALLAS, AND CITY OF DALLAS TRANSPORTATION, AS WELL AS CITY OF DALLAS FIRE PROTECTION TO ALL AGREE TO ONE THING. THAT SO FAR HAS ELUDED US. WE CONSTANTLY GIVE THEM OPTIONS, AND THEY NEVER PICK THE SAME OPTIONS. IT'S JUST SOMETHING THAT WE DON'T HAVE AN END IN SIGHT ON THAT ONE PARTICULAR ISSUE. WE'RE VERY LUCKY THAT OUR DEBT AND EQUITY ARE WILLING TO ALLOW US TO GO FORWARD AND CLOSE AND DO THE WORK THAT WE HAVE THE PERMITS TO DO, BUT WE DO NOT HAVE FULL DEVELOPMENT PERMITS. WE HAVE FULLY EXECUTED G-MAX CONTRACT. WE HAVE DEBT, EQUITY ALL LINED UP AND READY TO CLOSE, AND WE'RE ALL LOOKING FORWARD TO MOVING THIS CONSTRUCTION ALONG. [04:05:10] >> IS IT TXDOT OR DALLAS FIRE? >> ALL THREE OF THEM. DALLAS TRANSPORTATION WILL APPROVE SOMETHING, TXDOT WILL SAY NO. DALLAS TRANSPORTATION WILL APPROVE SOMETHING, TXDOT WILL APPROVE SOMETHING, THEN DALLAS FIRE WILL SAY NO. THEN WE START BACK AT THE BEGINNING AGAIN. THERE'S JUST NOT THAT MANY OPTIONS HERE TO DO ANYTHING. TXDOT WANTS EVERY ENTRANCE TO BE 250 FEET WIDE. WE ONLY HAVE, CALL IT 400 FEET OF FRONTAGE, AND A BUNCH OF THAT'S ACTUALLY TAKEN UP BY EXISTING BUILDINGS. ONE OF TXDOT'S SOLUTIONS WAS FOR US TO DEMOLISH PART OF A BUILDING TO GET AN ENTRANCE ON A HISTORIC SITE. IT'S A LOT OF NEGOTIATING WITH NOT A LOT OF RESULTS. WE'RE VERY HOPEFUL. THE LAST ROUND OF COMMUNICATION ACTUALLY WAS THIS MORNING BETWEEN THE CITY AND TXDOT, BUT THE PERSON FROM DALLAS FIRE IS ON VACATION. THEY DIDN'T GET SIGN OFF, BUT WE'RE VERY HOPEFUL THAT WE'RE JUST GOING TO BE ABLE TO KEEP THE CONDITION AS IS. ANOTHER THING THAT WE'VE BEEN FIGHTING IS THEY'VE ASKED US TO ACTUALLY SIGN LIABILITY FOR ANYBODY WHO EXITS STEMMONS FREEWAY AND TURNS ACROSS THE THREE LANES OF TRAFFIC TO GET INTO OUR SITE, BASICALLY AT A 90 DEGREE ANGLE, WHICH I'VE NEVER HEARD OF A DEVELOPER TAKING LIABILITY FOR CAR ACCIDENTS ON A FRONTAGE ROAD, BUT THAT'S SOMETHING THEY'VE ASKED US FOR, AND WE'VE OBVIOUSLY SAID WE CAN'T TAKE ON THAT RISK. IT'S BEEN A LOT OF BACK AND FORTH. >> WHEN YOU USE THE WORD DEMO, ISN'T THIS AN ADAPTIVE REUSE? >> IT IS. THERE'S STILL DEMISING WALLS THAT ARE EXISTING, SO WE CAN DEMO THOSE OUT. THE POOL DECK THAT IS EXISTING FROM 1965 IS BEYOND REPAIR, SO WE CAN DEMO THAT. BETWEEN DEMO, MAKE SAFE, JUST CLEANING UP, THOSE THINGS BEFORE STARTING THE INTERIOR FULL REHAB, WE HAVE ABOUT 6-8 WEEKS OF WORK THAT WE CAN DO WITHOUT A FULL BUILDING PERMIT. WE'RE PREPARED TO DO THAT AND HOPE THAT WE CAN GET THIS RESOLVED WITHIN THE NEXT TWO MONTHS. BUT ONCE AGAIN, OBVIOUSLY, IT DOESN'T SEEM LIKE THERE'S ANY GUARANTEES TO THAT. >> THE ASSISTANCE YOU'RE GETTING FROM THE HOUSING AUTHORITY, IS ALL OF THAT STILL IN PLACE? >> WE DON'T HAVE ANY ASSISTANCE FROM THE HOUSING AUTHORITY, BUT ALL OF OUR FINANCING AND THE CITY OF DALLAS MONEY, EVERYTHING LIKE THAT IS STILL IN PLACE. >> DALLAS MONEY IS IN NO DANGER OF GOING AWAY? >> NO. THEY CONTRIBUTED. WE HAVE ALREADY ACQUIRED THE HOTEL AND THEY CONTRIBUTED AT ACQUISITION. WE'RE $30 MILLION IN. IT'S GOING FORWARD. >> YOU DON'T HAVE A PRIVATE PARTY? >> NO. WE DON'T HAVE A PRIVATE PARTY. THIS IS JUST A PERMITTING ISSUE OF UNTIL THOSE ENTRANCES ARE RESOLVED, WE CAN'T GET OUR FINAL PERMIT BECAUSE WE DON'T HAVE FINAL SITE PLAN APPROVAL. >> IS IT SENATOR JOHNSON'S DISTRICT? >> I BELIEVE SO, YES. >> I THINK HE MIGHT HELP. >> YOU CAN'T PUT THE TXDOT DIVIDER ON THE OFFERING? >> WE'VE ASKED. THAT WOULD BE THE GREATEST THING EVER. THEY REFUSED. BOLLARDS, ANYTHING. WE SAID ALL THEY HAD TO DO WAS LENGTHEN IT ABOUT 30 FEET. IT'S BRAND NEW. IT WAS BASICALLY A CHOICE TO KEEP IT ACROSS FROM AN EXISTING ENTRANCE, AND THEY DID AND BASICALLY PUT IT BACK ON US. >> ARE YOU HAVING PROBLEMS WITH YOUR NATIONAL PARK SERVICE? >> NO. WE HAVE ONE MORE RESUBMITTAL, BUT THAT'S NOT EXPECTED TO DELAY OUR CONSTRUCTION. WE'VE GOTTEN THAT UNDER CONTROL. >> YOU START THE CONSTRUCTION PROCESS, WHICH BEGINS WITH THE DEMO? >> YEAH. WE DON'T REALLY HAVE MUCH OF A CHOICE. WE NEED TO GET THIS GOING. >> THEN WHEN THAT ENDS? >> WE HOPE WE HAVE A PERMIT. ONCE AGAIN, WE'RE IN A VERY FORTUNATE SITUATION THAT OUR DEBT AND EQUITY HAS AGREED TO CLOSE ON JUST DEMO PERMITS VERSUS MAKING US WAIT THIS OUT FOR A FULL PERMIT. >> HOW MUCH ARE WE REQUESTING THE EXTENSION AT THIS POINT? >> SIX MONTHS. >> BUT UNLESS SOMEONE WEIGHS IN ON YOUR BEHALF TO GET THE BALL ROLLING, YOU COULD BE BACK? >> I DO NOT FORESEE THAT. WE'VE GOTTEN THE PEOPLE TO START WEIGHING IN ALREADY. IT JUST HASN'T COME TO FRUITION, THE FINAL DECISION, [04:10:02] BUT WE'VE EXERTED AS MANY RESOURCES AS POSSIBLE TO MOVE UP THE CHAIN AT TXDOT AND AT THE CITY OF DALLAS TO GET SOMEBODY TO COME TO A CONCLUSION. >> STAFF RECOMMENDS APPROVAL. >> YES. WE HAD ACTUALLY RECOMMENDED APPROVAL ON A FULL EXTENSION, WHICH IS WHAT'S REFLECTED IN THE BAR. IF ZACH ONLY WANTS SIX MONTHS, THEN THAT'LL HAVE TO BE READ IN THE RECORD, I SUPPOSE. >> WHAT IS THE FULL EXTENSION? >> UNTIL DECEMBER OF '26, WHICH IS THE DEFAULT IF SOMEBODY DOESN'T ASK FOR THE PLACED IN SERVICE DEADLINE TO BE MOVED UP AS A LOT OF FOLKS HAVE THESE DAYS. >> THAT'S WHAT YOU RECOMMENDED? >> THAT'S WHAT WE HAD RECOMMENDED, YES, BASED ON THE ORIGINAL REQUEST. BUT SIX MONTHS, I'M SURE WE CAN GET BEHIND A RECOMMENDATION FOR SIX MONTHS AS WELL. >> WELL, I THINK THE LONGER EXTENSION, SEEMS TO ME LIKE WE'LL HAVE ANOTHER OPPORTUNITY TO MAKE ANOTHER EXTENSION IF WE DON'T TAKE THE ORIGINAL RECOMMENDATION. I'M IN FAVOR OF THE ORIGINAL RECOMMENDATION TO AVOID THAT. >> MR. HARPER, IF YOU WANT TO MAKE A MOTION. >> I MOVE THE BOARD GRANT THE REQUESTED TREATMENT UNDER APPLICATION OF THE FORCE MAJORITY RULE TO THE CABANA DESIGN DISTRICT. ALL IS DESCRIBED, CONDITIONED, AND AUTHORIZED IN THE BOARD ACTION REQUEST RESOLUTION AND ASSOCIATED DOCUMENTS ARE SIGNED. >> SECOND. >> MOTION MADE BY MR. HARPER, SECONDED BY MR. MARCHANT. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSED? HEARING NONE. MOTION CARRIES. >> THANK YOU. >> GET IT DONE. ITEM 27 IN THE AGENDA. PRESENTATION, DISCUSSION OF POSSIBLE ACTION FOR RETURN AND REALLOCATION OF TAX CREDITS IN THE TAX ACT, SECTION 11.65 RELATED TO CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR WESTWIND AMARILLO. >> WESTWIND AMARILLO RECEIVED ITS AWARD OF HOUSING TAX CREDITS IN 2023. SINCE THAT AWARD, THE PROJECT HAS BEEN IMPACTED BY COST INCREASES AND INTEREST RATE HIKES THAT HAVE CREATED AN UNEXPECTED FUNDING GAP. IN ADDITION TO THESE FACTORS, WHICH HAVE INCREASED COSTS FOR MANY DEVELOPMENTS THROUGHOUT TEXAS, POTTER COUNTY HAS BEEN HIT WITH FOUR EXTREME WEATHER EVENTS SINCE THE SUMMER OF THE AWARD, WHICH HAVE CAUSED LASTING LABOR SHORTAGES AND INCREASE TO INSURANCE COSTS. LUCKILY, THIS PROJECT HAS BEEN ABLE TO REMAIN FEASIBLE THROUGH VALUE ENGINEERING AND A REDESIGN. THIS REDESIGN, HOWEVER, HAS DELAYED THE CITY OF AMARILLO PERMITTING PROCESS AND JEOPARDIZED THE ABILITY OF THE DEVELOPMENT TO PLACED IN SERVICE TIMELY. THE PROJECT IS NOW FULLY PERMITTED AND EXPECTS TO CLOSE IN OCTOBER AND START CONSTRUCTION SHORTLY AFTER THAT. HOWEVER, THE DEVELOPMENT CONSTRUCTION PERIOD IS 16 MONTHS AND WILL NOW RUN THROUGH TWO WINTERS IN THE TEXAS PANHANDLE, WHICH HAVE IN RECENT TIMES BEEN PLAGUED BY A SERIES OF MULTIPLE SEVERE WEATHER EVENTS THAT HAVE SIGNIFICANTLY CONSTRAINED SUPPLY CHAINS. THE DEVELOPER HAS REQUESTED THE PLACED IN SERVICE DEADLINE BE EXTENDED BY SIX MONTHS TO JUNE 30TH, 2026. STAFF RECOMMENDS APPROVAL. I'M AVAILABLE FOR ANY QUESTIONS. AGAIN, REPRESENTATIVES OF THE DEVELOPMENT ARE ALSO PRESENT. >> WE HAVE PERMITS DONE. WE'RE WAITING TO CLOSE OCTOBER 15TH AND START CONSTRUCTION SHORTLY AFTER? >> YES. THE DEVELOPER PROVIDED US WITH A FAIRLY DETAILED TIMELINE AFTER THE BOARD BOOK REPRESENTED THIS. >> WE HAVE ELECTRICAL CONTRACTORS? I'M ASSUMING THAT'S THE CASE. DOES ANY BOARD MEMBER HAVE QUESTIONS ON THIS DATE, CERTAINLY START FORCE MAJEURE REQUEST? IF NOT, I'LL ENTERTAIN A MOTION ON ITEM 27 OF THE AGENDA. >> MR. CHAIRMAN, I MOVE THE BOARD GRANT THE REQUESTED TREATMENT UNDER AN APPLICATION OF THE FORCE MAJORITY RULE TO WESTWIND OF AMARILLO WITH A PLACED IN SERVICE DEADLINE OF JUNE 30TH, 2026. ALL IS DESCRIBED, CONDITIONED, AND AUTHORIZED IN THE CORRECTION REQUEST RESOLUTION AND ASSOCIATED DOCUMENTS ON THIS ARE SIGNED. >> MOTION MADE BY MS. FARIAS. >> SECOND. >> SECONDED BY MR. THOMAS. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSED? HEARING NONE. MOTION CARRIES. THANK YOU FOR COMING IN. >> MR. GOLDBERG, WOULD YOU MAKE SURE THAT WE HAVE THE TIMELINE OF THE PACKET NEXT TIME? >> ABSOLUTELY. >> ITEM 28. PRESENTATION, DISCUSSION OF THIS POSSIBLE ACTION ON THE REQUEST FOR RETURN AND REALLOCATION OF TAX CREDITS IN THE TAX ACT, SECTION 11.65 RELATED TO CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR LALITA SENIOR LIVING. [04:15:02] >> LALITA SENIOR LIVING IS A 78-UNIT DEVELOPMENT IN BROWNSVILLE THAT RECEIVED AN AWARD OF HOUSING TAX CREDITS IN 2022. THE BOARD PREVIOUSLY APPROVED FORCE MAJEURE TREATMENT FOR THIS PROJECT LAST YEAR, WHICH EXTENDED THE PLACED IN SERVICE DEADLINE TO DECEMBER 31ST, 2025. SINCE THE INITIAL AWARD, THE PROJECT HAS FACED UNFORESEEN COST INCREASES AND UNFAVORABLE EQUITY PRICING, WHICH PROMPTED MATERIAL CHANGES IN THE DESIGN AND PROJECT SIZE TO MAINTAIN FEASIBILITY. THESE CHANGES WERE APPROVED BY THE BOARD IN DECEMBER OF 2023, BUT THEIR IMPLEMENTATION HAS CAUSED ADDITIONAL DELAYS. IN PARTICULAR, THE APPLICANT CITES DELAYS IN THE CITY OF BROWNSVILLE PERMITTING PROCESS AND A RANGE OF DIFFICULTIES RE-SECURING A HUD FIRM COMMITMENT FOR THEIR 221(D)(4) LOAN. THE DEVELOPMENT NOW HAS THAT FIRM COMMITMENT AND THEIR PERMITS ARE READY FOR PAYMENT. CLOSING AND THE START OF CONSTRUCTION IS EXPECTED WITHIN THE NEXT 30 DAYS. HOWEVER, THE PROJECT'S CONSTRUCTION SCHEDULE IS NOW PROJECTED TO CONCLUDE IN JANUARY 2026, ONE MONTH AFTER THE CURRENT DEADLINE. THE OWNER IS REQUESTING A SIX-MONTH EXTENSION TO THE PLACED IN SERVICE DATE AGAIN TO JUNE 30TH, 2026. STAFF RECOMMENDS APPROVAL. >> AGAIN, WE HAVE PERMITS IN PLACE. WE HAVE A DATE CERTAIN ON CLOSING, AND IT'S VERY SHORT, 30 DAYS? >> YES. >> INTRODUCE YOURSELF. >> HI. GOOD AFTERNOON. DANIEL HENDREN WITH VERSA DEVELOPMENT, REPRESENTING LALITA SENIOR LIVING. YES, PERMITS ARE READY. THE PLAT WAS REALLY THE EXTENUATING FACTOR THERE. THAT'S BEEN APPROVED. PUB WAS A FINAL SIGNER ON THE PLAT. IT'S BEEN RECORDED. WE LOCKED OUR HUD RATE TWO FRIDAYS AGO. WE ARE JUST ANXIOUSLY ANTICIPATING HUD TO SET A CLOSING DATE. WHEN HUD SETS A CLOSING DATE, THAT IS THE DATE. IT DOES NOT GET PUSHED, AND WE WILL ALL BE READY FOR THAT. WE REQUESTED THE CLOSING DATE TO BE SEPTEMBER THE 18TH. WHILE THAT MAY BE ASPIRATIONAL, WE'RE HOPEFUL THAT IT'S ON THE 18TH OR WITHIN A WEEK THEREAFTER. WE HAVE THE GENERAL CONTRACTOR READY TO GO. THEY'VE ALREADY DONE 3D MODELING FOR SITE WORK. THE SITE IS CLEAR. WE ARE READY. IN FACT, WE REQUESTED AN EARLY START FROM HUD, WHICH THEY NOT SO GRACIOUSLY DENIED. OTHERWISE, WE WOULD HAVE ALREADY INSTALLED UTILITIES ON THE SITE. WE ARE READY. >> JANUARY '26? >> ABOUT THE THIRD WEEK OF JANUARY. YES, SIR. >> DOES ANYONE HAVE QUESTIONS FOR APPLICANT OR STAFF FOR US? IF NOT, I'LL ENTERTAIN A MOTION ON STAFF'S RECOMMENDATION TO GRANT. >> I MOVE THE BOARD GRANT THE REQUESTED TREATMENT UNDER APPLICATION OF THE FORCE MAJORITY RULE TO THE WESTWIND AMARILLO. >> LALITA SENIOR LIVING. >> SORRY. LET'S DO THAT AGAIN. I MOVE THE BOARD GRANT THE REQUESTED TREATMENT UNDER APPLICATION OF THE FORCE MAJORITY RULE TO LALITA SENIOR LIVING WITH A PLACED IN SERVICE OF JUNE 30TH, 2026. ALL IS DESCRIBED, CONDITIONED, AND AUTHORIZED IN THE BOARD ACTION REQUEST RESOLUTION AND ASSOCIATED DOCUMENTS ARE SIGNED. >> SECOND. >> MOTION MADE BY MR. HARPER. SECONDED BY MS. FARIAS. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSED? HEARING NONE. MOTION CARRIES. ITEM 29. PRESENTATION, DISCUSSION OF POSSIBLE ACTION ON REQUEST FOR RETURN AND REALLOCATION OF TAX CREDITS UNDER TAX ACT, SECTION 11.65 RELATED TO CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR WOODCREST APARTMENTS. MR. GOLDBERG. >> OUR NEXT ITEM CONCERNS WOODCREST APARTMENTS, AN 80-UNIT DEVELOPMENT IN ODESSA. THE PROJECT PROPOSES THE RECONSTRUCTION OF AN EXISTING PROPERTY WITH A HALF CONTRACT. WOODCREST RECEIVED ITS AWARD OF HOUSING TAX CREDITS IN 2022, AS WELL AS AN ALLOCATION OF TDHCA HOME-ARP IN 2023 TO ADDRESS FUNDING GAPS. THE BOARD PREVIOUSLY APPROVED FORCE MAJEURE TREATMENT FOR THIS DEVELOPMENT LAST DECEMBER, EXTENDING THE PLACED IN SERVICE DEADLINE TO DECEMBER 31ST, 2025. SINCE THE HOME-ARP AWARD AND THE MOST RECENT FORCE MAJEURE, THE PROJECT HAS BEEN FURTHER DELAYED BY A RANGE OF ADMINISTRATIVE ISSUES SURROUNDING HUD APPROVALS. THE PROJECT HAS SOUGHT A 221(D)(4) FINANCING TO MAINTAIN FEASIBILITY AMONG RISING COSTS. WHILE THE TERMS ARE MORE FAVORABLE, IT HAS CAUSED ADDITIONAL DELAYS DUE TO THE NEW LAYERS OF REGULATORY COMPLIANCE AND REVIEW. THE APPLICANT HAS ALSO CITED ISSUES WITH THE MARK-TO-MARKET PROCESS, WHICH ALIGNS CONTRACT RENTS WITH MARKET RENTS. THIS PROCESS WAS NECESSARY TO MAINTAINING FEASIBILITY, BUT EXCEEDINGLY AND UNEXPECTEDLY COMPLICATED TO APPROVE. I'VE SPOKEN WITH THE APPLICANT AT LENGTH ABOUT THIS, AND IT SEEMS LIKE IT WAS QUITE DIFFICULT TO NAVIGATE DUE TO THE NATURE OF THE PROJECT AS A RECONSTRUCTION WITH A HARP CONTRACT, BUT AN END IS IN SIGHT. THE PROJECT MAINTAINS THE SUPPORT OF THE CITY OF ODESSA, WHICH HAS PASSED THREE RESOLUTIONS OF SUPPORT THAT ARE PRESENT IN YOUR BOARD BOOK. THE PROJECT IS NOW SCHEDULED TO CLOSE THIS FALL, [04:20:02] AND THE APPLICANT HAS THEIR PERMITS AND ANTICIPATES STARTING CONSTRUCTION SOON AFTER. WITH A 12-MONTH PLAN CONSTRUCTION TIMELINE, THIS LEAVES LITTLE ROOM FOR ADDITIONAL DELAYS AND MAKES THE PROJECT AT RISK OF NOT MEETING THE DEADLINE. THE OWNER IS REQUESTING A SIX-MONTH EXTENSION TO JUNE 30TH, 2026. STAFF RECOMMENDS APPROVAL. REPRESENTATIVES OF THE DEVELOPMENT ARE PRESENT IN THE CASE THAT YOU HAVE ANY QUESTIONS, AND I AM ALSO AVAILABLE. >> MELISSA FISHER, RISE RESIDENTIAL. WE ARE READY. AS HE STATED, WE HAVE PERMITS, WE HAVE OUR CONTRACTS, WE HAVE EVERYTHING READY TO GO. WE HAVE UPDATED TIMELINE AS OF THIS WEEK FROM HUD AND TDHCA FROM THE ARPA TEAM. WE SHOULD HAVE OUR FIRM COMMITMENT AT THE END OF THIS MONTH, AND ARPA WILL BE READY TO CLOSE IN DECEMBER. WE WILL BE READY TO START CONSTRUCTION IN JANUARY. AS HE SAID, IT'S A 12-MONTH CONSTRUCTION TIMELINE, IT'S ONLY 80 UNITS, BUT WE ARE A FULL DEMOLITION RECONSTRUCTION WITH PROJECT-BASED VOUCHERS FOR THE HAP DEAL. VERY FEW PROJECTS ARE ABLE TO DO THIS WITH A FULL DEMOLITION AND RECONSTRUCTION BRAND NEW UNITS FOR THESE HAP RECIPIENTS. IT'S A VERY WORTHY DEAL AND WE'RE READY TO GO, AND WE ONLY NEED THE SIX MONTHS. >> SO WE'RE WAITING FOR IT TO OPEN AND CLOSE? >> HUD. AS HE SAID, WE HAD TO GO THROUGH 209 EXERCISE, WHICH WE DID NOT ANTICIPATE, BUT WE'RE ALMOST THERE. >> CAN YOU PROVIDE ANY GREATER TARGET ON SAYING [INAUDIBLE] [OVERLAPPING]. >> SURE 9:30. THEY SAID THAT BY THE END OF THIS MONTH, WE SHOULD HAVE OUR FIRM COMMITMENT READY TO GO. >> THEN AFTER THAT THAT ONE WILL TAKE TO ACTUALLY CLOSE? >> AFTER THAT, WE THOUGHT WE WOULD BE READY TO CLOSE WITHIN A MONTH, BUT I THINK ARPA SENT US AN E-MAIL LAST NIGHT SAYING THAT IT WOULD TAKE THEM A LITTLE BIT LONGER, WHICH IS FINE. THEY SAID DECEMBER. >> THE BUILDING IS VACANT? >> ALMOST. WE'VE NOTIFIED EVERYONE AND BEEN THROUGH THIS NON-RENEWAL PROCESS. WE'RE READY BECAUSE WE HAVE SEVERAL EMPTY BUILDINGS. >> BUT THERE'S STILL OCCUPANTS? >> WE DO HAVE OCCUPANTS, A FEW. I THINK WE HAVE 12 UNITS OCCUPIED OUT OF 80, AND THEY'RE IN THE LAST BUILDING THAT WE'LL BE WORKING ON, SO WE CAN DEFINITELY START IMMEDIATELY. >> DO THEIR ABILITY TO STRING THIS OUT AND SEE? >> NO. WE'VE BEEN THROUGH ALL OF THE NECESSARY, THE HUD REQUIRED NOTIFICATION PROCESSES. >> MR. CHAIRMAN, I THINK SEVERAL WHERE WE HAVE SAID HUD [INAUDIBLE],WELL, HUD HAS NO LEADERSHIP THAT'S BEEN CONNECTING THE ANSWERS FROM. BUT THEY WILL HAVE ALL THE ANSWERS BY SEPTEMBER 30TH BECAUSE THAT'S THE END OF THE FISCAL YEAR, AND THEY KNOW THEY MUST SIGN OFF, OR WE'RE LISTING. HOPEFULLY, 30TH, SOMEBODY MUST SIGN SOMETHING. >> PLEASE. >> THE STAFF HAS 100 DEGREE OF CONFIDENCE IN THAT, BECAUSE TIMELINES ARE GOING TO BE MET. >> YES. WE'RE WORKING WITH THEM DIRECTLY BECAUSE OF THAT HOME ART FUNDING, SO WE'RE PRETTY INTIMATELY FAMILIAR WITH THIS TEAM, IN THIS PROJECT. >> ARE THERE ANY OTHER QUESTIONS ON THIS ITEM? IF NOT, I WILL ENTERTAIN THE MOTION OF 929 IF YOU REJECT THAT. >> MR. CHAIRMAN, I MOVE THE BOARD TO GRANT THE REQUEST OF TREATMENT UNDER AN APPLICATION OF THE FORCE MAJEURE RULE TO WOOD PREST DEPARTMENTS FOR THE PLACED AND SERVICE DEADLINE OF JUNE 30, 2026. ALL IS DESCRIBED, CONDITIONED, AND AUTHORIZED AND THE BOARD ACTION REQUEST RESOLUTION AND ASSOCIATED DOCUMENTS ON THIS ITEM. >> SECOND. >> MOTION MADE BY MR. THOMAS, SECONDED BY MR. HARPER. ALL THOSE IN FAVOR SAY, AYE. >> AYE. >> ANY OPPOSED? HEARING NONE, THE MOTIONS CARRIES. >> THANK YOU. >> THE AUTHORITY PRESIDENT, YOU'RE GOING TO DO THIS WITH PRESENTATION, DISCUSSION, AND POSSIBLE ACTION ON REQUEST FOR RETURN AND REALLOCATION OF TAX CREDITS UNDER 10TH ACT, SECTION 11.65, RELATED TO CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR TOWN EAST TRAILS. MR. GOLDBERG. >> TOWN EAST TRAILS IS A DEVELOPMENT IN MESQUITE, DALLAS COUNTY, WHICH RECEIVED ITS AWARD OF HOUSING TAX CREDITS IN 2023. THE PROJECT HAS BEEN IMPACTED BY A VARIETY OF DELAYS STEMMING FROM THE LENGTHY CITY OF MESQUITE APPROVAL PROCESS. FIRST, THE PROJECT WAS SUBSTANTIALLY SLOWED DOWN BY AN UNEXPECTED DRAINAGE STUDY. THE APPLICANT HAD ALL READY ATTENDED PRE-DEVELOPMENT MEETINGS WITH CITY ENGINEERS THAT INDICATED EXISTING STORM DRAINAGE PLANS WERE SUFFICIENT AND NO ADDITIONAL DETENTION WOULD BE REQUIRED. HOWEVER, AFTER SEVERE RAIN IN THE AREA, THE CITY REQUIRED A NEW REGIONAL STUDY TO BE CONDUCTED. [04:25:03] WHILE THIS NEW STUDY DID CONFIRM THE PROJECT WOULD NOT HAVE TO PROVIDE ADDITIONAL DETENTION, IT SUBSTANTIALLY SLOWED DOWN THE DESIGN AND REVIEW PROCESS. SECOND, THE CITY OF MESQUITE REQUIRES ALL MULTIFAMILY DEVELOPMENTS TO DONATE LAND FOR A PUBLIC PARK OR NEGOTIATE A FEE IN LIEU OF THIS DONATION. BECAUSE OF RECENT COST INCREASES, THE PROJECT COULD NO LONGER AFFORD THE FEE AS ORIGINALLY CALCULATED AND HAD TO SEEK APPROVAL FOR AN ALTERNATIVE. THIS WAS NOT RESOLVED UNTIL LATE AUGUST WHEN THE CITY COUNCIL ALLOWED THE PROJECT TO REDUCE THE FEE IN EXCHANGE FOR BUILDING AN ONSITE PICKLE-BALL COURT. HAD TO GET THAT DETAIL IN THERE. >> I READ THAT, AND THAT IS IN MY NOTES. >> THESE UNUSUAL REQUIREMENTS HAVE DELAYED THE APPROVAL OF MANY NECESSARY PERMITS AND IN TURN CLOSING IN THE START OF CONSTRUCTION. THE PROJECT NOW EXPECTS THESE STEPS TO TAKE PLACE IN OCTOBER, LEAVING ONLY 14 MONTHS TO MEET THE CURRENT PLACED IN-SERVICE DEADLINE. LIKE THE PREVIOUS REQUEST, THE OWNER IS ONLY REQUESTING A SIX-MONTH EXTENSION TO JUNE 30TH, 2026. STAFF RECOMMENDS APPROVAL. >> YOU SKIPPED A PART. THIS ONE: INTRODUCE YOURSELF. >> ALAN NAUL WITH THE JAVELIN GROUP. >> ALLAN, SO GET THE FORMALITIES OUT OF THE WAY. YOU HAVE A DATE, STARTING AND CLOSING AND READY TO START? >> WE'RE READY TO GO. WE SHOULD HAVE OUR FULL BUILDING PERMIT, I THOUGHT WE'D HAVE IT THIS WEEK, BUT IT'S ANY DAY NOW. AS SOON AS WE GET OUR BUILDING PERMIT FROM THE CITY, THEN WE CAN MOVE TOWARDS CLOSING. BUT WE'VE GOT EVERYTHING RESOLVED WITH THE CITY. >> SO IT'S IMMINENT? >> YES. >> WE'RE READY TO GO, WE DON'T HAVE TO WAIT FOR IT. ALL OTHER APPROVALS? >> RIGHT? >> NOW, LET ME ASK. AS I READ THIS, THE CITY OF MESQUITE IS REQUIRING THAT A MULTI-PENDANT DEVELOPER DONATE LANDS? >> YES. >> FOR A PARK. >> IT'S RIDICULOUS, YES. >> IN LIEU OF THAT, YOU COULD PAY A SHAKEDOWN FEE? >> YES. >> GIVE HIM MONEY? >> YES. THAT WOULD NOT BENEFIT OUR SENIORS. WE NEGOTIATED TO BUILD A PICKLE-BALL COURT WITH PART OF THE MONEY, AT LEAST IT'LL HELP OUR SENIORS. >> THE PICKLE BALL COURT IS THAT A PUBLIC? >> NO. >> THEIR ORIGINAL DEMAND THAT YOU DONATE LAND FOR A PUBLIC PARK IN THE END, THEY DIDN'T REQUIRE ANY PUBLIC FACILITY JUST A ON-SITE RECREATIONAL? >> RIGHT. IT'S REALLY AN OFFSHOOT. THE CITY OF MESQUITE HISTORICALLY, OR OVER THE LAST 10 YEARS HAS BEEN A VERY ANTI-MULTIFAMILY DEVELOPMENT. IT'S A TACTIC TO KEEP OUT MULTIFAMILY DEVELOPMENT, I THINK. ALMOST NO ONE DONATES LAND BECAUSE THERE'S NO EXTRA LAND TO DONATE FOR A PARK. IT'S A SHAKEDOWN, LIKE YOU SAID, IT'S JUST A WAY TO GET MORE MONEY. >> I WAS JUST FLABBERGASTED WHEN I SAW THIS. IN MY NOTES I EVEN PUT IT EXPLICIT. VERY INTERESTING. >> IT'S VERY COMMON IN DALLAS. >> I WOULD APPRECIATE EITHER THROUGH FORMAL CHANNELS OR PERSONALLY HAVE MEMBERS OF THE INDUSTRY DEVELOPMENT COMMUNITY E-MAIL ME EXAMPLES OF THESE TYPES OF BACKDOOR, NIMBY TYPES OF EFFORTS THAT PEOPLE ENCOUNTER IN REAL LIFE LIKE THIS. >> FLOWER MOUND IS ARE PROBABLY THE WORST. >> I WOULD LOVE TO HEAR THESE SUCH OF STORIES AND SHINE LIGHT ON THEM. >> SURE. >> THIS IS WHAT'S CAUSING DEVELOPERS ALL DELAYS AND COSTS. IT JUST I'M STUNNED THAT THIS HAS HAPPENED. AGAIN, ONCE I HEARD ABOUT THIS, I'M HEARING THERE'S LOTS OF OTHER EXAMPLES. >> BUT I WOULD SAY THE GOOD NEWS IS, WE'VE MADE A LOT OF HEADWAY POLITICALLY IN MESQUITE. WE OWN A NURSING HOME IN MESQUITE ALSO AND OUR PROJECT WAS ONE OF THE FIRST AFFORDABLE PROJECTS THAT GOT CITY SUPPORT, AND THEY'VE BEEN VERY SUPPORTIVE. THEY'VE CHANGED THE TWO MOST ANTI-DEVELOPMENT FOLKS HAVE GOTTEN VOTED OUT. THERE'S A LOT OF GOOD CHANGES GOING ON IN MESQUITE, AND THERE'S A HUGE NEED, SO WE'RE EXCITED TO GET IT GOING. >> WELL, THAT'S GREAT. >> IT'S NOT OPEN TO THE PUBLIC, BUT IF YOU WANT TO COME TO PLAY ON OUR PICKLE-BALL COURT OR ANYTIME YOU WANT TO COME. [04:30:01] >> I SURE DO. >> MR. NAUL, IS 600 BUCKS A UNIT? WHAT WAS THE PER-UNIT PER-FEE? >> I'M NOT SURE EXACTLY. IT WAS $170,000 AND 76 UNITS. >> ITS $170. IT'S VERY STANDARD FOR ANY UNIT, ANY KIND OF LITTLE UNIT. >> THAT'S ADDITIONAL PRELIMINARY FEES. >> WELL, YOU CAN GIVE A LAND IF YOU HAVE IT. >> WELL, EVEN IF YOU HAVE IT, THEY HAVE TO AGREE THAT IT'S AN APPROPRIATE PLACE FOR A PUBLIC PARK, WHICH IS ALMOST NEVER THE CASE. IT'S JUST SILLY. >> I WANT TO HEAR ABOUT OTHER INSTANCES LIKE THIS AROUND THE STATE. I'LL ENTERTAIN MOTION 930 OF THE AGENDA. >> MOVE THE BOARD TO GRANT THE REQUEST FOR TREATMENT UNDER THE APPLICATION FOR FORCE MAJEURE RULE TO THE TOWN EAST TRAILS FOR THE PLACE-IN-SERVICE DEADLINE ON JUNE, 30TH OF 2026, ALL DESCRIBED CONDITIONED AND AUTHORIZED AND BOARD ACTION REQUEST, RESOLUTION, AND ASSOCIATE DOCUMENTS ON THIS ITEM. >> SECOND. >> MOTION MADE BY MR. HARPER, SECONDED MR. MARSHALL. ALL IN FAVOR SAY, AYE. >> AYE. >> ANY OPPOSED? HEARING NONE, MOTION CARRIES. THIRTY ONE OF THE AGENDA, THE PRESENTATION, DISCUSSION OF POSSIBLE ACTION ON A REQUEST FOR RETURN AND REALLOCATION TAX CREDITS UNDER 10TH ACT, SECTION 11.65 RELATED TO CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR LC MANOR. >> LC MANOR IS A 36-UNIT DEVELOPMENT TO BE COMPLETED IN ABILENE THAT RECEIVED ITS AWARD OF HOUSING TAX CREDITS IN 2023. THE PROJECT PROPOSES THE ADAPTIVE REUSE OF A HISTORIC FORMER MILK PROCESSING PLANT. THE PROJECT HAS BEEN DELAYED BY AN EXTENDED DESIGN REVIEW AND APPROVAL PROCESS TIED TO COMPLICATIONS FROM THE ADAPTIVE REUSE OF A HISTORIC STRUCTURE. FIRST, THE DESIGN PHASE WAS DELAYED BY THE FACT THAT THE EXISTING PLANT IS AN UNUSUAL BUILDING WITH NUMEROUS DESIGN QUIRKS THAT PROVED TO BE DIFFICULT TO WORK AROUND. IT CONTAINS BOTH INDUSTRIAL AND OFFICE SPACE, CREATING UNIQUE CHALLENGES THAT ADDED TWO MONTHS TO THE ORIGINAL TIMELINE. DURING THEIR REVIEW, THE STATE HISTORIC PRESERVATION OFFICE CONCLUDED THAT SEVERAL STRUCTURES THAT ORIGINALLY WERE SLATED TO BE DEMOLISHED MUST NOW BE PRESERVED. THIS NECESSITATED A LARGE REDESIGN TO ENSURE UNITS WERE APPROPRIATELY DISTRIBUTED. THAT ALONE CAUSED A DELAY OF AROUND FOUR MONTHS. OUTSIDE OF DESIGN-RELATED CHANGES, THE APPLICANT CITES THE OVERALL APPROVALS PROCESS AND COORDINATION WITH STATE AND FEDERAL AGENCIES NECESSARY TO PROCEED WITH A HISTORIC PROJECT AS A GENERAL CAUSE OF DELAYS THROUGHOUT. THE APPLICANT EXPECTS CLOSING AND THE START OF CONSTRUCTION TO TAKE PLACE IN NOVEMBER. ASSUMING AN 18-MONTH CONSTRUCTION PERIOD, THIS MEANS THEY'LL BE PLACED IN SERVICE IN MAY OF 2026, FIVE MONTHS AFTER THE CURRENT PLACEMENT SERVICE DEADLINE. I WILL NOTE HERE, I SPOKE TO THE DEVELOPER DURING THE MEETING, AND DURING THEIR ORIGINAL REQUEST, THEY ASKED FOR, I BELIEVE EIGHT MONTHS TO AUGUST 31ST, 2026. THEY HAVE INDICATED THAT THEY PROBABLY WILL NEED THE FULL EXTENSION TO DECEMBER OF 26 DUE TO SOME RECENT CIRCUMSTANCES THAT ARE NOT CONTEMPLATED IN THIS WRITE-UP THAT THEY CAN INFORM YOU ABOUT. >> THE DEVELOPER? >> YES, SIR. >> GOOD AFTERNOON, MR. CHAIRMAN. BOARD MEMBERS, MY NAME IS MICHAEL ASH WITH JES DEVCO. THERE IS AN OUTBUILDING IN ABILENE THAT IS THE BANE OF MY EXISTENCE. WHEN WE SUBMITTED THE APPLICATION FOR TAX CREDITS IN 2023, WE PLANNED ON DEMOLISHING THE BUILDING. OUR NATIONAL PARK SERVICE TOLD US WE COULD NOT BECAUSE IT CONTRIBUTES TO THE HISTORIC CHARACTER OF THE SITE AND THE PROPERTY ITSELF. IT IS CORRUGATED STEEL, TIN, IT IS METAL, IT HAS NO PURPOSE FOR US OTHER THAN AS A STORAGE BUILDING. THAT'S CAUSED A LITTLE BIT OF DELAY AS WE WORK THROUGH THAT NEGOTIATION AND SOME OF THE REDESIGN. IN JULY, AND THIS HAPPENED AFTER WE SUBMITTED OUR REQUEST FOR A FORCE MAJEURE FINDING THAT BUILDING THAT I HATE WAS DAMAGED IN A STORM. WE HAD A STRUCTURAL ENGINEER OUT IN AUGUST TO TAKE A LOOK AT IT. THE STRUCTURAL ENGINEER BELIEVES THAT IT'S GOING TO BE MOST EFFECTIVE, CHEAPEST, SAFEST FOR IT TO COME DOWN, BUT NOW WE NEED TO GO BACK TO PARK SERVICE AGAIN TO GET THEIR APPROVAL FOR THAT AND FOR WHATEVER WE END UP REDESIGNING, WHICH WILL JUST BE A STORAGE SHED OF SOME SORT IN THAT PLACE. THAT'S WHY WE'VE ASKED FOR AN EXTENSION FROM THE ORIGINAL AUGUST OF 2026 TO DECEMBER OF 2026 BECAUSE OF THE ADDITIONAL FACT THAT WE'RE GOING TO HAVE TO GO BACK TO THE PARK SERVICE. >> WHAT OTHER APPROVALS ARE YOU WAITING FOR AT THIS POINT? >> THAT'S ESSENTIALLY IT. WE'LL HAVE TO GO THROUGH THE DESIGNS FOR THE FINAL PERMIT FOR THE CITY, BUT THE CITY HAS BEEN VERY COOPERATIVE. THEY'VE DONE WHATEVER WE'VE ASKED THEM TO, THAT'S LEGALLY WITHIN THEIR AUTHORITY. I DON'T ANTICIPATE THAT'LL BE AN ISSUE. >> THEN CLOSING WHEN? >> IN THE LETTER WE SUBMITTED, I THINK WE'VE SAID NOVEMBER, CLOSING IT'S LIKELY TO BE JANUARY OR FEBRUARY, BY THE TIME WE GET DONE WITH THE PARK SERVICE. [04:35:03] >> BUT THERE'S STILL NO DATE. NO CERTAINTY, IF ANY IS THERE. >> THERE IS NO DATE CERTAIN UNTIL WE GET THROUGH THAT PROCESS OF REWORKING WITH THE PARK SERVICE. >> WHAT OTHER ENTITIES ARE HELPING YOU? >> NOBODY. PARK SERVICE, THE HISTORIC CREDITS, OUR TAX CREDITS, FINANCING. >>BUT THE HISTORIC TAX CREDITS ARE ALL READY COMMITTED? >> YES, ALL READY COMMITTED, ALL READY APPROVED. >> OTHER BOARD MEMBERS HAVE QUESTIONS ON THIS? >> MR. CHAIRMAN, THOUGH, THE DONE DELAY IS AN ACT OF GOD, SO I CAN'T BELIEVE YOU DIDN'T WANT IT. >> APPRECIATE THAT. THAT IT'S A TRULY FORCE MAJEURE. >> CALL IT AN ACT OF GOD. >> YES. >> IT'S AN ACT OF GOD. >> IT IS LC? >> LC MANOR. YES, SIR. IT'S WAS AN OLD BOARD AND MILK PROCESSING PLANT. >> I'M HESITANT WITH JUST NOT HAVING MORE OF THESE DATES CERTAINLY THAT WE'RE TALKING ABOUT. BUT IF THE STAFF FEEL CONFIDENT THAT THE INFORMATION PRESENTED IS GOING TO HAPPEN SOON? >> YES, SIR. >> I WILL ASK YOU FOR A FULL-YEAR EXTENSION. >> FOR THIS ONE? >> THAT'S JUST IN CASE IT'S NECESSARY. >> YES, PLEASE. WE THINK IT'LL PROBABLY WRAP UP IN OCTOBER OF 2026 NOW WITH THE DELAY OF GOING BACK TO PARK SERVICE, BUT I DON'T WANT TO BE BACK HERE AGAIN ASKING FOR IT. >> YES, AND AGAIN, THE BAR READS AS AUGUST 31ST, BUT THE REQUEST IS NOW A FULL YEAR. >> IT'S A REQUEST? >> FOR A FULL YEAR. >> IS THIS A SENIOR FACILITY? >> YES. >> [INAUDIBLE]. >> THAT WILL NOT HAPPEN. >> BOARD MEMBER [INAUDIBLE] WILL PREPARE TO MAKE A MOTION ON THIS? >> MR. CHAIRMAN. I MOVE THE BOARD GRANT THE REQUEST OF TREATMENT UNDER AN APPLICATION OF THE FIRST MATURE COUNCIL MEMBER WITH A PLACED IN SERVICE DEADLINE OF DECEMBER 31, 2026, ALL AS DESCRIBED, CONDITIONED, AND AUTHORIZED IN THE BOARD ACTION REQUEST, RESOLUTION AND ASSOCIATED DOCUMENTS ON THE SITE. >> MOTION MADE BY MS. FARIAS, SECONDED BY MR. HARPER. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSE? HEARING NONE, MOTION CARRIES. >> THANK YOU. >> PUSH. ITEM 32 ON THE AGENDA. PRESENTATION, DISCUSSION OF POSSIBLE ELECTION ON THEIR REQUEST FOR RETURN AND RELOCATION OF TAX CREDITS UNDER 10 TECH SECTION 11.65 RESULTING FROM FOR MATURE EVENTS FOR MAPLE PARK. >> MAPLE PARK MANOR IS A 30 UNIT DEVELOPMENT TO BE COMPLETED IN LOCKHART, CALDWELL COUNTY. THE PROJECT WAS AWARDED HOUSING TAX CREDITS IN 2023. THE APPLICANT HAS BEEN AWARE THROUGHOUT THE PROCESS THAT THE DEVELOPMENT OF THIS PROJECT WOULD REQUIRE SOME OFF SITE IMPROVEMENTS. THE OWNER HAD PLANNED AND BUDGETED FOR THESE ITEMS SINCE THE TIME OF THE ORIGINAL APPLICATION AND HAS DEVELOPED IN LOCKHART UNDER SIMILAR CIRCUMSTANCES. THE CITY OF LOCKHART HAS, HOWEVER, SINCE CHANGED THE PROCESS BY WHICH THESE IMPROVEMENTS ARE INCORPORATED INTO THE DEVELOPMENT APPROVAL PROCESS. UNLIKE THE PREVIOUS INSTANCE, THE CITY IS REQUIRING THESE IMPROVEMENTS TO BE COMPLETE AND ACCEPTED BEFORE ISSUING A BUILDING PERMIT. THIS IS FAR EASIER SAID THAN DONE BECAUSE WITHOUT THE BUILDING PERMIT, THE APPLICANT IS UNABLE TO CLOSE AND CANNOT FINANCE THE REQUIRED PUBLIC IMPROVEMENTS. THIS ESSENTIALLY CREATED AN IMPASSE THAT SIMPLY DID NOT EXIST IN THEIR PRIOR EXPERIENCES WHERE THE CITY ALLOWED THE DEVELOPMENT TO BE PERMITTED DESPITE THE IMPROVEMENTS NOT BEING COMPLETE. I WILL ADD THAT THIS IS IN ADDITION TO PRIOR DELAYS CAUSED BY A MATERIAL REDESIGN OF THE PROJECT NECESSARY TO REMAIN FEASIBLE, WHICH WAS APPROVED IN APRIL OF 2024. NOW, I'VE BEEN INFORMED THAT THE APPLICANT HAS FOUND A SOLUTION TO THIS IMPASSE WITH THE CITY WITHIN THE LAST TWO DAYS OR SO, THAT WILL ALLOW THE DEVELOPMENT TO MOVE FORWARD, SO WE HAVE A PATH FORWARD HERE. THE APPLICANT INTENDS TO CLOSE AND START CONSTRUCTION IN DECEMBER PLACING THE ANTICIPATED CONSTRUCTION COMPLETION DATE IN JUNE OF 2026, SIX MONTHS PAST THE CURRENT PLACEMENT SERVICE DEADLINE. THE OWNER IS REQUESTING AN EIGHT MONTH EXTENSION TO THE PLACEMENT SERVICE DATE TO AUGUST 31, 2026. STAFF RECOMMENDS APPROVAL AND REPRESENTATIVES OF THE DEVELOPMENT ARE AGAIN PRESENT. >> YOU'RE STILL HERE. >> I'M STILL HERE, UNFORTUNATELY FOR YOU, MICHAEL ASHLY AS DEVCO. THIS IS REALLY JUST SIMPLY AN ISSUE OF BATTLING THROUGH THE CITY'S BUREAUCRACY. THEY WOULD NOT ACCEPT OUR PLANS FOR REVIEW PRIOR TO THE ROADWAY AND PUBLIC UTILITIES BEING DONE AND BEING ACCEPTED BY THE CITY. [04:40:02] WE'VE BEEN ABLE TO CONVINCE THEM TO AGREE TO ACCEPT OUR PLANS AND START THE REVIEW WITHOUT WAITING TO THE END OF THAT. THE PLANS WILL BE SUBMITTED TO THEM, I THINK BY MID SEPTEMBER. WE HOPE TO BE ABLE TO HAVE THOSE THROUGH THEIR REVIEW PROCESS BY MID DECEMBER AND CLOSE IN LATE DECEMBER. >> SO THE CONFIDENCE LEVEL OF THIS TIME FRAME, ACTUALLY. >> EXTREMELY HIGH. YES, SIR. >> QUESTIONS? HEARING STAFF IS COMPETENT IN THIS TO LINES FOR. OKAY. I'LL ENTERTAIN A MOTION ITEM 32 WITH THE AGENDA. >> MR. CHAIRMAN, I MOVE THE BOARD TO GRANT REQUESTED TREATMENT UNDER AN APPLICATION OF THE FOREST MISSOURI RULE TO MAPLE PARK WITH A PLACED IN SERVICE DEADLINE OF AUGUST 31, 2026, ALL AS DESCRIBED IN ADDITION AND AUTHORIZED THE BOARD ACTION REQUEST RESOLUTION AND ASSOCIATED DOCUMENTS ON THIS ITEM. >> SECOND. >> MOTION MADE BY MR. MARSHALL, SECOND BY MR. HARPER. ALL IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSE? HEARING NONE, MOTION CARRIER. >> THANK YOU. >> FILE POST ITEM ON THE AGENDA, 33. PRESENTATION, DISCUSSION OF THE POSSIBLE ACTION ON THE REQUESTS FOR REALLOCATION TAX CREDITS. ITEM 10 TAX SECTION 125.65. AS CREDIT RETURNS RESULTING IN FORCE MAJEURE FOR FISH POND AT VICTORIA. >> THANK YOU, MR. VASQUEZ, MINOR CORRECTION. WE'VE GOT 33 AND THEN 34, SO THIS IS SECOND TO US. >> THIRD. >> BUT THESE TWO ARE QUICK. >> THERE'S TWO FISH PONDS, CORRECT? >> THAT'S CORRECT. THESE TWO ARE QUICK AND THEY ARE SUBSTANTIALLY SIMILAR. FISH POND AT VICTORIA IS A 75 UNIT DEVELOPMENT IN VICTORIA. IT ORIGINALLY RECEIVED TAX CREDITS IN 2022. THE BOARD APPROVED FORCE MAJEURE IN 2023, WHICH ALLOWED THEM TIME TO GO LOOK FOR ADDITIONAL FINANCING TO FILL A FUNDING GAP THAT THEY HAD. THEY FOUND THAT FINANCING IN LATE APRIL OF THIS YEAR WHEN TDHCA POSTED A HOME NOTICE OF FUNDING AVAILABILITY UNDER WHICH THEY APPLIED FOR $4.9 MILLION IN HOME FUNDS. THIS SOLVES THEIR FINANCIAL GAP, WHICH IS A GOOD THING, BUT IT DOES CREATE A TIME DELAY DUE TO THE HOME PROGRAMS ENVIRONMENTAL REVIEW REQUIREMENTS. FEDERALLY, ONCE YOU APPLY FOR HOME FUNDING, YOU MAY NOT COMMIT WHAT'S CALLED A CHOICE LIMITING ACTION UNTIL YOU RECEIVE YOUR ENVIRONMENTAL REVIEW AND CLEARANCE. A CHOICE LIMITING ACTION IS ANYTHING THAT DISTURBS THE SITE ENVIRONMENTALLY OR WOULD LIMIT THE GRANTEE'S CHOICES IN TERMS OF WHAT TO DO WITH THOSE FUNDS. EXAMPLES OF CHOICE LIMITING ACTIONS INCLUDE THINGS LIKE PURCHASING THE SITE IF YOU HAVEN'T ALREADY, ALTHOUGH IN THIS CASE, THEY PURCHASED THE SITE BEFORE APPLYING FOR HOME FUNDS. ANY SITE WORK, ANY DEMOLITION WORK, ANY CONSTRUCTION WORK, ALL OF THAT IS PROHIBITED UNTIL YOU GET YOUR ENVIRONMENTAL CLEARANCE. WE ANTICIPATE THAT THE ENVIRONMENTAL CLEARANCE IS GOING TO BE AVAILABLE IMMINENTLY. I WOULDN'T BE SURPRISED IF I GOT BACK TO THE OFFICE AND IT WAS IN MY INBOX. I MEAN, WE'RE IN THAT WINDOW. ONCE THEY GET THAT, THEY WILL BE ABLE TO START CONSTRUCTION. I BELIEVE PERMITS ARE ALSO IMMINENT BASED ON THE INFORMATION THAT THEY'VE GIVEN ME HERE RECENTLY. WE ANTICIPATE HAVING THE HOME AWARD TO YOU EITHER AT THE OCTOBER OR NOVEMBER BOARD MEETING, SO ABOUT FIVE OR SIX MONTH TURNAROUND FROM APPLICATION UNTIL THE AWARD IS PRESENTED, THAT'S PRETTY TYPICAL. WE HAVEN'T RUN INTO ANY UNUSUAL SNAGS WITH PROCESSING THE APPLICATION. THEY'VE BEEN VERY RESPONSIVE WITH US. THEY'VE JUST BEEN HELD UP BY THEIR ENVIRONMENTAL REVIEW AND THE FACT THAT THEY CAN'T COMMIT A CHOICE LIMITING ACTION. THEY ARE ANTICIPATING AN 18 MONTH CONSTRUCTION TIMELINE ON THIS DEAL, SO EVEN IF THEY COULD GET STARTED TODAY, THEY ARE NOT GOING TO MEET THEIR CURRENT PLACED IN SERVICE DEADLINE, AND BECAUSE OF THAT, STAFF RECOMMENDS THAT YOU APPROVE THE ONE YEAR EXTENSION. >> SO WE'LL WAIT FOR THE ENVIRONMENTAL APPROVAL TO COME BACK. >> YES, SIR. >> I HAVEN'T GOTTEN ANY INDICATION THAT ANYTHING IS UNUSUAL WITH IT. ONCE THEY GET THAT ENVIRONMENTAL, TDHCA DOES HAVE TO ISSUE WHAT'S CALLED A NOTICE TO PROCEED RELATED TO OUR OBLIGATIONS FOR DAVIS BACON AND FAIR WAGE LABOR ACT, BUT THAT'S A REALLY QUICK PROCESS THAT I MEAN, WE CAN KNOCK THAT OUT IN AN AFTERNOON, AND SO THEIR ABILITY TO START CONSTRUCTION IS IMMINENT, AND I THINK UNDERSTANDABLY THEY'RE CONCERNED ABOUT HAVING TO WAIT A MONTH OR TWO FOR THIS REQUEST WHEN THEY'RE READY TO GO. >> PERMIT IS IN PLACE OR ARE WE GOING TO BE WAITING FOR ALL THAT TO HAPPEN? >> THEY'RE IN THE FINAL STAGES OF PERMITTING BASED ON WHAT THEY'VE TOLD ME. DAVE, DO YOU HAVE A DATE WHEN YOU MIGHT HAVE THOSE PERMITS? >> YES. >> COME OUT AND INTRODUCE YOURSELF OUT MORE. >> DAVE [INAUDIBLE] FISH POND DEVELOPMENT. THE CITY HAS ALREADY REVIEWED AND APPROVED THE BUILDING PLANS, AND THEY'RE JUST WAITING FOR US TO PAY THE FEE FOR OUR PERMIT. [04:45:06] >> OKAY, SO THEY DIDN'T INDICATE >> YES, SIR. >> [INAUDIBLE] >> YES, SIR. >> AS CODY ALLUDED TO, EVEN EARLY ON, I SAID, HEY, CAN WE START SITE WORK? WE'LL FUND IT OURSELVES JUST TO HELP MOVE THE PROCESS ALONG, BUT IT WAS A DEFINITIVE, NO, CAN'T TOUCH THE SITE. >> ALSO WE'RE LOOKING FOR EARLIER JUST FOR THIS? >> YES, SIR. YES. >> QUESTIONS. >> WHEN WE'RE IN THE APPLICATION PROCESS [OVERLAPPING] >> YES, SIR. >> WHICH IS VERY STRINGENT. NONE OF THESE SURFACE IN THAT PROCESS THAT GIVE YOU THE INDICATION THAT THERE MAY BE THESE OBSTACLES DOWN THE ROAD. >> SURE. THE OBSTACLE IN THIS CASE WAS JUST THAT THEY HAD COST OVERRUNS AFTER THEY SUBMITTED THE APPLICATION AND WE REVIEWED IT. >> NOT THE FISH POND AND ALL THE DISTURBING PROPERTY AND ALL THESE OTHER THINGS. >> SURE, I UNDERSTAND. THEY HAD TO APPLY FOR HOME FUNDS FROM US AFTER THEY GOT THEIR INITIAL TAX CREDIT AWARD. ANY DEVELOPMENT THAT APPLIES FOR HOME FUNDS HAS TO GO THROUGH WHAT'S CALLED AN ENVIRONMENTAL REVIEW, AND THAT'S VERY EXTENSIVE. IT MAKES SURE YOU'RE NOT DISTURBING PRIME FARMLAND OR THE LOCAL ENVIRONMENT OR ANY AQUIFERS. GOD HELP YOU IF A RARE BIRD EVER LANDED ON THE SITE. I MEAN, IT'S EXTENSIVE. >> NOW THAT THEY HAD APPLIED FOR HOME FUNDS DURING THE INITIAL APPLICATION. >> THAT'S EXACTLY CORRECT. YES, SIR. >> WE WOULD NOT HAVE. >> WE WOULD NOT HAVE. THEY ONLY HAD TO COME BACK IN ONCE THEY EXPERIENCED THE COST OVERRUNS AFTER THE TAX CREDIT AWARD. >> OWNERSHIP STRUCTURE [INAUDIBLE]. IN THIS CASE, I DON'T UNDERSTAND THE OWNERSHIP STRUCTURE. >> SURE. I DIDN'T PUT THAT REPORT TOGETHER, SO I'M NOT SURE WHAT IT SAYS, DAVE, WOULD YOU LIKE TO ANSWER QUESTIONS ABOUT THE OWNERSHIP STRUCTURE? BETCO IS A CONSULTING FIRM. >> YES, SIR. BETCO IS OUR CONSULTANT AND OUR HUB PARTNER. >> THANK YOU. >> ANY QUESTIONS ON THIS ITEM 33? IF NOT, CONTINUE THE MOTION. >> I MOVE THE COURT GRANT THE REQUESTED TREATMENT UNDER THE APPLICATION OF FORCE MAJEURE RULE TO THE FISH POND VICTORIA AS DESCRIBED CONDITION AND AUTHORIZED AT REQUEST RESOLUTION AND ASSOCIATE DOCUMENTS IN SIDE. >> MOTION BY MR. [INAUDIBLE] IS THERE A SECOND? >> SECOND. >> SECOND BY MS. FARIAS. ALL THOSE IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSE? HEARING NONE, MOTION CARRIES. NOW, THE ITEM 33. >> THIRTY FOUR. >> THIRTY FOUR ON THE AGENDA. PRESENTATION, DISCUSSION ON THE POSSIBLE ACTION ON THE REQUEST FOR RETURN AND REALLOCATION OF TAX CREDITS IN 10 TECH SECTION 11.65 RELATED TO CREDIT RETURNS RESULTING FROM FORCE MAJEURE EVENTS FOR FISH WATER. >> THANK YOU, MR. VASQUEZ. THIS REQUEST IS, IN MANY WAYS IDENTICAL TO THE PREVIOUS ONES, SO I'LL JUST HIT THE DIFFERENCES. THIS IS A 48 UNIT DEVELOPMENT IN HUNTSVILLE, INITIALLY RECEIVED TAX CREDITS IN 2022. YOU HAVE PREVIOUSLY APPROVED AN EXTENSION IN 2023 TO ALLOW THEM MORE TIME TO SEEK ADDITIONAL FUNDING. AT THE SAME TIME THAT THEY SUBMITTED THEIR OTHER APPLICATION FOR HOME FUNDS, THEY SUBMITTED AN APPLICATION FOR THIS DEVELOPMENT FOR 3.5 MILLION IN HOME FUNDS. THEY'VE HAD THE SAME HOLDUPS RELATED TO THE ENVIRONMENTAL REVIEW. THE ONLY REMAINING SIGNIFICANT DIFFERENCES, AS OF THE LAST TIME I SPOKE TO THEM AND THIS MAY HAVE CHANGED IN THE LAST FEW DAYS, BUT AS OF THE LAST TIME I SPOKE TO THEM, THEY HAD NOT YET APPLIED FOR THEIR PERMITS. HOWEVER, WHEN I SPOKE TO THEM, I CAN'T TELL YOU WHAT'S GOING ON IN THE CITY OF HUNTSVILLE, BUT I WOULD LIKE FOR US TO FIND OUT SO THAT OTHER CITIES CAN MODEL IT. THEY ARE OPTIMISTIC THAT THEY ARE GOING TO HAVE A QUICK PERMITTING PROCESS BASED ON RECENT PERMITS THAT THEY HAVE GOTTEN FROM THE CITY OF HUNTSVILLE. IT'S THE ONLY QUICK PERMITTING PROCESS, I THINK I'VE HEARD OF IN THE LAST COUPLE OF YEARS. SIMILAR TO THE LAST REQUEST, THEY'RE IN GOOD SHAPE. THEY'RE GOING TO BE READY TO START CONSTRUCTION IN THE NEAR FUTURE AND STAFF RECOMMENDS APPROVAL. >> THERE'S STILL NO DATES OF CERTAINTY? >> THAT IS CORRECT. NOT FOR THIS ONE. >> IS THERE ANYTHING THAT WE CAN GET THE DEPARTMENT RECEIVED THAT CAN GIVE US MORE CERTAINTY ON THIS? >> SURE. I THINK THAT THE ONLY THING THAT WE DON'T HAVE ON THIS ONE THAT WE HAD ON THE LAST ONE IS INFORMATION ABOUT WHEN THE PERMITS ARE GOING TO BE READY, [04:50:01] WHEREAS WITH THE PREVIOUS ONE, WE KNEW THAT THEY'RE EMINENTLY COMING. WITH THIS ONE I THINK WE HAVE LESS INFORMATION ON THAT. DAVE, DO YOU HAVE ANY SENSE OF WHEN YOU'LL HAVE YOUR BUILDING PERMITS? >> YES. WE'VE ACTUALLY BUILT THE SAME PROPERTY IN HUNTSVILLE, AND WE'VE GONE THROUGH THE PERMITTING PROCESS. I'VE BEEN IN TOUCH WITH WITH THE CITY MANAGER AND THE BUILDING DEPARTMENT, AND IN THAT PROCESS ON OUR LAST PROPERTY, AS CODY MENTIONED, WAS VERY SMOOTH, AND SO WE'VE BASICALLY BUILT THE SAME PROPERTY, SO THERE'S NO I DON'T SEE ANTICIPATE ANY ISSUE THERE. ONE OF THE THINGS THAT WE NEEDED TO DO IS CLEAR THE SITE TO DO MORE OF A TOPO SURVEY BECAUSE IT'S A WOODED SITE. BUT AGAIN, WE REACHED OUT AND WE CAN'T EVEN CLEAR THE SITE OF THE TREES TO GET OUT AND DO A MORE THOROUGH TOPO SURVEY. THAT'S THE HOLD UP THERE. IN VICTORIA, IT WAS ALREADY A VACANT SITE, AND URBAN SITE SO WE DIDN'T HAVE TO CLEAR IT. >> SO IT'S JUST CITY OF HUNTSVILLE THAT WE ARE WAITING FOR. >> YES, SIR. THEN OBVIOUSLY WE'RE WAITING FOR OUR TDHCA FUNDING, SO WE CAN LIKE I SAID, WE'VE BUILT THIS PROPERTY IN HUNTSVILLE. I THINK OUR CONTRACTOR WAS SIX MONTHS AHEAD OF SCHEDULE, SO IT'S SOMETHING THAT WE KNOW. >> ANY BOARD MEMBERS HAVE QUESTIONS ON THIS ITEM? CODY, ITEMS PRESENTED TODAY AS FAR AS CERTAINTY OF DATES? >> SURE. >> SEEMS LIKE THE WEAKEST. >> SURE. >> BUT IT ALSO SOUNDS A COUPLE OF THINGS THAT'S COMING. YOU'VE DONE THIS BEFORE. >> YES, SIR. >> THAT'S A GOOD SIGN. ANY OTHER BOARD MEMBERS WHO HAVE QUESTIONS? DO YOU WANT TO DENY OR JUST FOR. I'LL ENTERTAIN A MOTION ON THE STAFF'S RECOMMENDATIONS YOU GRANT THE FORCE MAJEURE REQUEST. >> MR. CHAIRMAN, I MOVE THE BOARD GRANT THE REQUEST TO TREATMENT UNDER AN APPLICATION OF THE FORCE MAJEURE RULE TO FISH POND AND WALKER. ALL IS DESCRIBED, CONDITIONED, AND AUTHORIZED IN THE BOARD A REQUEST, RESOLUTION AND ASSOCIATED DOCUMENT ON THIS ITEM. >> MOTION MADE BY MS. FARIAS. IS THERE A SECOND? >> SECOND. >> MOTION MADE BY MS. FARIAS, SECONDED BY MR. HARPER, WHO NEEDS SOME COFFEE BEFORE DRIVE ON. ALL IN FAVOR SAY AYE. >> AYE. >> ANY OPPOSED? HEARING DONE, MOTION GOES. >> THANK YOU. >> THANK YOU ALL. >> THE BOARD HAS ADDRESSED THE POSTED AGENDA ITEMS. NOW IS THE TIME OF THE MEETING WHEN MEMBERS OF THE PUBLIC CAN RAISE ISSUES WITH THE BOARD ON MATTERS OF RELEVANCE TO THE DEPARTMENT'S BUSINESS OR REQUEST THAT THE BOARD PLACE SPECIFIC ITEMS ON FUTURE AGENDAS FOR CONSIDERATION. IS THERE ANYONE WHO WOULD LIKE TO PROVIDE PUBLIC COMMENT AT THIS TIME? SEE NONE. THE NEXT SCHEDULED MEETING OF THE GOVERNING BOARD IS 10:00 A.M. ON THURSDAY, OCTOBER 10, 2024 AT THE LOCATION TO BE. >> TEXT. >> I SAID EARLIER, AND SOMEONE ELSE SAID IT'S NOT THERE. >> YES I SEE MISSPOKE. >> WE'LL BE BACK AT THE BUILDING ON THE GREEN BUILDING 125 EAST 11TH STREET, ONE FOR POSTINGS. IT IS 3:07, AND THIS MEETING IS ADJOURNED. * This transcript was compiled from uncorrected Closed Captioning.