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Home My WebLink AboutMN-IURAGOV-2020-04-17 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MEETING MINUTES ITHACA URBAN RENEWAL AGENCY GOVERNANCE COMMITTEE (GC) 8:30 A.M., Friday, April 17, 2020 Present: Eric Rosario, Chairperson; Kathy Schlather, Vice‐Chairperson; Susan Cummings Excused: David Whitmore Vacancy: 1 Staff: Nels Bohn; Charles Pyott Guests: None I. Call to Order Chairperson Rosario called the meeting to order at 8:38 A.M. II. Agenda Additions/Deletions None. III. Public Comments (3‐minute max. per person) None. IV. Review of Meeting Minutes: January 31, 2020 Cummings moved, seconded by Schlather, to approve the January 31, 2020 meeting minutes, with one minor modification. Carried Unanimously: 3‐0 Regarding the last meeting’s discussion about the Committee’s meeting schedule, Rosario suggested Bohn identify the Committee’s optimal meeting frequency, accounting for any periodic requirements or specific deadlines. Bohn replied he would be happy to do so. Cummings asked when the Committee would find out the results of its recommendations to the Mayor for candidates to fill current vacancies. Bohn replied he conveyed the recommendations to the Mayor, but has not yet received a response. He will follow up with the Mayor. Approved: 8/21/20 IURA GC Meeting Minutes April 17, 2020 Page 2 of 16 2 V. New Business A. 2019 Financial Audit Bohn explained the FY2019 Financial Audit Report raised no issues, findings, recommendations, or concerns of any kind. Since the IURA is considered a component of the City, the IURA’s audit only represents a small proportion of the overall City‐wide audit. Schlather moved, seconded by Cummings: Approval of 2019 IURA Financial Audit Report WHEREAS, the Ithaca Urban Renewal Agency (IURA) derives the majority of its finances from grants awarded to the City of Ithaca, and WHEREAS, for financial reporting purposes, the IURA is a blended component unit of the City of Ithaca whose financial activity is reported in the Special Grant Fund, a governmental fund of the City of Ithaca financial statements, and WHEREAS, the IURA contracts separately from the City to have its finances audited within 90 days of the end of its Fiscal Year to comply with the NYS Public Authorities Accountability Act, and WHEREAS, the IURA received an audited 2019 draft IURA financial report in March 2020, and WHEREAS, at its April 17, 2020 meeting, the IURA Governance Committee reviewed the financial report and attached correspondence; now, therefore, be it RESOLVED, the IURA hereby approves the Financial Report of the Ithaca Urban Renewal Agency for the period January 1, 2019 through December 31, 2019, prepared by the accounting firm of Insero & Company, LLP. Carried Unanimously: 3‐0 B. Annual Investment Policy & Report Bohn explained the NYS Public Authorities Law (PAL) requires the IURA to annually review its Investment Guidelines and produce a report, demonstrating how the IURA complies with its guidelines. Cummings wondered if the IURA should establish relationships with more local financial institutions that contribute to the community. Bohn replied the IURA does work with local financial institutions to some extent (e.g., Alternatives Federal Credit Union which is active in small‐business lending). Tompkins Trust Company (TTC) is easy to work with administratively. The IURA transfers funds from one account to another frequently. TTC is an active player in the community. IURA GC Meeting Minutes April 17, 2020 Page 3 of 16 3 Cummings asked if there is a specific person the IURA works with at TTC, when IURA staff need assistance. Bohn replied IURA staff does a lot of internet banking without needing assistance, although TTC is very responsive, when needed. Schlather moved, seconded by Cummings: Approval of IURA Investment Guidelines WHEREAS, pursuant to the Public Authorities Accountability Act, as amended, the IURA is required on an annual basis to review its investment guidelines and report, and WHEREAS, the IURA originally adopted Investment Guidelines on March 25, 2011, and WHEREAS, the Director of Community Development prepared an annual 2019 IURA Investment Report, and WHEREAS, at their April 17, 2020 meeting, the IURA Governance Committee reviewed the IURA Investment Guidelines and the 2019 Investment Report; now, therefore, be it RESOLVED, that the IURA hereby reaffirms its approval of the IURA Investment Guidelines. Carried Unanimously: 3‐0 Ithaca Urban Renewal Agency Investment Guidelines Public Authorities Law (PAL) requires each public benefit corporation to adopt investment guidelines regarding the investing, monitoring and reporting of funds of the corporation and annually review and approve such guidelines (section 2925 of PAL). Investing The primary investment objective for managing funds of the IURA is to preserve capital and comply with all applicable regulations and requirements pertaining to the funds managed. A secondary investment objective is to maximize interest earned on monies managed by the IURA. A tertiary investment objective is to deposit investment funds in qualified financial institutions that meet the financial needs of residents and businesses within the IURA service area. An additional consideration is ease of administration and services offered by depository institutions, such as the availability of internet banking, including on‐line documentation of cancelled checks and account balances, and free wire transfers. IURA GC Meeting Minutes April 17, 2020 Page 4 of 16 4 Because the IURA acts as a pass‐through of grant funds from federal agencies to end users, the grant funding source agency may establish special requirements for management of such funds. For instance, the US Department of Housing & Urban Development requires that all bank interest earned on HUD funds be remitted to the US Treasury annually. Agency monies may be invested in obligations of the US Treasury or deposited in federally insured commercial banks, trust companies, or credit unions, preferably institutions located within the City of Ithaca and the urban renewal project boundary area. Agency monies may be deposited in the above‐listed institutions in demand accounts and certificates of deposit. Collateral is required for demand deposits and certificates of deposit at a minimum of 100% of all deposits not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of New York State and its municipalities and school districts. Signatories on deposit accounts shall be designated by resolution of the IURA. Only a designated signatory is authorized to establish investment accounts. Two signatures of designated signatories shall be required on all checks issued by the IURA. Monitoring Investment statements shall be reconciled with the general ledger on a monthly basis. The reconciliation shall be reviewed by staff to verify that the investment statements and the IURA balance sheet match on a monthly basis. No less than annually, the Agency shall review its investment guidelines and its investments. Reporting An independent auditor shall review IURA investments on an annual basis as part of the independent audit of financial statements. The IURA shall review the independent audit and address any recommendations, concerns or findings. Ithaca Urban Renewal Agency Investment Report 2019 Investment Report 2019 investments by the Ithaca Urban Renewal Agency (IURA) comply with the adopted IURA investment guidelines. All 2019 investments were deposited at Tompkins Trust Company (TTC), a FDIC‐insured trust company located within the Ithaca Urban Renewal Project Boundary Area. IURA GC Meeting Minutes April 17, 2020 Page 5 of 16 5 Total IURA bank balances were $1,754,567.78 as of 12/31/19 and are divided between 6 savings accounts and one checking account. $250,000 of this investment amount is covered by FDIC insurance with the remaining $1,504,567.78 collateralized by specific securities held by TTC that are pledged to the IURA. Obligations held as collateral are obligations of the United States and its agencies and obligations of the state, its municipalities and its school districts. The market value of the pledged collateral was $2,279,438 as of 12/31/19, which satisfies the IURA investment policy that requires the value of collateral pledged must equal at least 100% of deposits not covered by federal deposit insurance. C. Annual NYS Authorities Budget Office (ABO) Reporting Bohn explained the report was not submitted by the usual March 31st deadline, since the State issued a special rule extending the deadline because of the COVID‐19 situation. The process of submitting the online report is reasonably cumbersome. Rosario asked about the financial disclosures question on p.2 of the Public Authorities Reporting Information System (PARIS) form: “Are the Authority’s Board members, officers, and staff required to submit financial disclosure forms in accordance with Section 2825 (3) of PAL?” Bohn replied that question is only applicable to State authorities. A legal ruling concluded municipal authorities are not required to submit financial disclosures. Schlather moved, seconded by Cummings: Approval of Reports Submitted to NYS Authorities Budget Office (ABO) WHEREAS, pursuant to the Public Authorities Accountability Act, as amended, the IURA is required on an annual basis to submit reports to the New York State Authorities Budget Office (ABO), and WHEREAS, the IURA Director of Community Development is designated to certify accuracy of the reporting, and WHEREAS, the reporting is due to be submitted within 90 days of the end of the fiscal year, and WHEREAS, it is appropriate that IURA members exercise oversight over the staff reporting to the ABO, and WHEREAS, at its meeting of April 17, 2020, the IURA Governance Committee reviewed the reporting and recommends the following action; now, therefore, be it RESOLVED, that the IURA hereby approves FY2019 IURA public authority reports submitted to the New York State Authorities Budget Office, including the following: • Budget report • Annual report IURA GC Meeting Minutes April 17, 2020 Page 6 of 16 6 • Procurement report • Investment report • Certified financial audit report Carried Unanimously: 3‐0 D. Independent Contractor Services 1. Legal Services Bohn explained Geldenhuys is a long‐standing IURA attorney with a broad base of expertise, while Ruswick shares similar expertise. Sulimowicz specializes in real estate transactions. Ruswick’s expertise is in bankruptcy law and has also been reviewing HOME contracts. MARIETTE GELDENHUYS Cummings remarked she could not support voting to approve funding for Mariette Geldenhuys at this time. She had a prior experience with Geldenhuys on a closing, which involved what Cummings believed to be a significant error. In addition, prior to the 247 Cherry Street closing, she believes there were a couple of issues associated with that transaction which Geldenhuys should have called to the IURA’s attention. Schlather noted it is the second year Cummings expressed an objection to continuing to use Geldenhuys’ services. She asked if Cummings merely wants to record her objection, or if she is asking IURA staff to employ another attorney. Cummings replied she believes an intermediate step would be to simply communicate the issue to Geldenhuys: clarifying what the IURA’s expectations are and noting that a concern was raised. Cummings understands IURA staff have a good working relationship with Geldenhuys. Bohn replied he will discuss the issue with Geldenhuys. Rosario asked if the resolution could still be submitted to the IURA Board for review. Bohn replied, yes. The resolution will be submitted to the Board for its consideration. RICHARD RUSWICK Bohn explained that the IURA relies on Ruswick for Low‐Income Housing Tax Credit (LIHTC) projects. Cummings moved, seconded by Schlather: 2020 Procurement of Independent Legal Services: Ruswick WHEREAS, the contract for independent legal services with Richard Ruswick of Levene, Gouldin, & Thompson, LLP (Ruswick) expires on February 28, 2020, and WHEREAS, in accordance with IURA procurement policy and regulations contained in 24 CFR §85.36, the IURA selected Ruswick through a Request for Proposals (RFP) selection process in 2019, and IURA GC Meeting Minutes April 17, 2020 Page 7 of 16 7 WHEREAS, per applicable procurement regulations, a contractor selected through an initial competitive selection process may be renewed for up to two additional one‐year terms without undertaking a new competitive selection process, and WHEREAS, a proposed 2020 contract would constitute the first one‐year extension of the base independent consultant contract, and WHEREAS, Ruswick submitted a proposal on February 27, 2020 to continue providing legal services to the IURA at a maximum billing rate of $210 per hour, a 4.5% increase from the current contract rate, and WHEREAS, the IURA staff is highly satisfied with the quality of legal services provided by Ruswick, and WHEREAS, the 2020 IURA budget recommended a total authorized contract amount of $10,000 for legal services; now, therefore, be it RESOLVED, that IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute a contract extension for independent contractor legal services with Levene, Gouldin, & Thompson, LLP, at a maximum hourly rate of $210 per hour with the total amount not to exceed $10,000, and be it further RESOLVED, that the source of such funds for legal services shall be derived from a variety of funding sources, including, but not limited to, CDBG and HOME funds, and expenses shall be billed to the appropriate source of funds for which the services were performed. Carried Unanimously: 3‐0 SHARON M. SULIMOWICZ Schlather moved, seconded by Cummings: 2020 Procurement of Independent Legal Services: Sulimowicz WHEREAS, the contract for independent legal services with Sharon M. Sulimowicz Attorney‐at‐ Law (Sulimowicz) expires on February 28, 2020, and WHEREAS, in accordance with IURA procurement policy and regulations contained in 24 CFR §85.36, the IURA selected Sulimowicz through a Request for Proposals (RFP) selection process in 2019, and IURA GC Meeting Minutes April 17, 2020 Page 8 of 16 8 WHEREAS, per applicable procurement regulations, a contractor selected through an initial competitive selection process may be renewed for up to two additional one‐year terms without undertaking a new competitive selection process, and WHEREAS, a proposed 2020 contract would constitute the first one‐year extension of the base independent consultant contract, and WHEREAS, Sulimowicz submitted a proposal on February 28, 2020 to continue providing legal services to the IURA at a maximum billing rate of $175 per hour, a 0% increase from the current contract rate, and WHEREAS, the IURA staff is highly satisfied with the quality of legal services provided by Sulimowicz, and WHEREAS, the 2020 IURA budget recommended a total authorized contract amount of $6,000 for legal services; now, therefore, be it RESOLVED, that IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute a contract extension for independent contractor legal services with Sharon M. Sulimowicz, Attorney‐at‐Law, at a maximum hourly rate of $175 per hour with the total amount not to exceed $6,000, and be it further RESOLVED, that the source of such funds for legal services shall be derived from a variety of funding sources, including, but not limited to, CDBG and HOME funds, and expenses shall be billed to the appropriate source of funds for which the services were performed. Carried Unanimously: 3‐0 2. Community Development/Loan Underwriting Services HARRY SICHERMAN Bohn indicated the IURA employs Community Development Consulting Services primarily for loan underwriting of small business loans. H. Sicherman/The Harrison Studio has always provided the IURA with sound advice on CDBG‐related issues. The IURA will also likely be working with the company on upcoming CDBG‐CV projects. Cummings moved, seconded by Schlather: 2020 Procurement of Community Development Consulting Services WHEREAS, the contract for existing community development consulting services expired on February 28, 2019, and IURA GC Meeting Minutes April 17, 2020 Page 9 of 16 9 WHEREAS, in accordance with IURA procurement policy and regulations contained in 2 CFR Part 200 for procurement of professional services, the IURA issued a Request for Proposals (RFP) for community development consulting services in 2019, and WHEREAS, the RFP authorized annual extensions of up to three years for selected consultants, and WHEREAS, H. Sicherman/The Harrison Studio was selected to provide community development consulting services, and WHEREAS, the 2020 IURA budget authorized up to $10,000 for community development consulting services, including loan underwriting, and WHEREAS, H. Sicherman has expressed interest for a 2020 extension of their independent contractor agreement at the following hourly rates: H. Sicherman: $185/hour E. Krause: $145/hour, and WHEREAS, the 2020 hourly salary rates remain unchanged from 2019, and WHEREAS, at its April 17, 2020 meeting, the Governance Committee reviewed this matter and recommends the following; now, therefore, be it RESOLVED, that IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute independent contractor agreements for community development consulting to H. Sicherman/The Harrison Studio – up to $10,000 And be it further, RESOLVED, that the source of such funds for legal services shall be derived from a variety of funding sources, including, but not limited to, CDBG and HOME funds, and expenses shall be billed to the appropriate source of funds for which the services were performed. Carried Unanimously: 3‐0 E. IURA Strategic Planning 1. FY2019 Budget‐to‐Actual Comparison ― Review Bohn explained the IURA expended a little less than it budgeted. The Legal Services category was the only outlier, resulting from a special case involving an INHS Low‐Income Housing Tax Credit (LIHTC) project. INHS eventually reimbursed the IURA for those legal costs. Cummings suggested adding a footnote to clarify that. Bohn agreed to do so. IURA GC Meeting Minutes April 17, 2020 Page 10 of 16 10 2. Annual Financial PosiƟon 2/29/20 ― Review Bohn explained the Bank Account Analysis tracks activity in IURA bank accounts over the past 3 years.  #11002 Operating Acct (#01) ― Checking account. No restrictions.  #11004 CD‐RLF (#02) ― CDBG Revolving Loan Fund (RLF) account.  #11005 GOSC (#18) ― NYS Governor’s Office of Small Cities (GOSC) CDBG funds.  #11007 CD‐RLF Sec 17 (#15) ― Section 17 fund, derived from a now defunct program for funding affordable rental units 20 years ago, which has some restrictions associated with it.  #11014 Industrial Parks (#14) ― Industrial Park revenue account (e.g., Cherry Street)  #11020 UDAG (#03) ― Urban Development Action Grant (UDAG), which is among the least restrictive.  #11029 HODAG (#04) ― Housing Development Action Grant (HODAG), which can only be used for affordable rental housing projects.  #11030 Non CDBG (#05) ― Catch‐all account, which has maximum flexibility.  #11050 Gateway (#17) ― Gateway fund has now been closed out.  #11054 NHI (#19) ― Neighborhood Housing Initiative (NHI) Bond Fund for affordable for‐sale housing units. IURA GC Meeting Minutes April 17, 2020 Page 11 of 16 11 Bohn noted the initial $143,000 RLF balance is being reduced to approximately $3,000, since $140,000 was recently earmarked for the COVID‐19 small business loan program. Bohn explained that the “Projected Balance #05 Bank Account” table is an analysis of the #05 account, which has no Federal funding restrictions. The IURA originally projected a $334,000 balance, but the $1.2M balance reflected at the end of February 2020 is the true balance of what is currently available. The increase resulted from the unanticipated Cayuga Green loan pay‐off. If the IURA maintains or increases the account balance, it can consider itself to be in a sound financial position, since the account is a fall‐back account. (Continued on next page.) IURA GC Meeting Minutes April 17, 2020 Page 12 of 16 12 IURA GC Meeting Minutes April 17, 2020 Page 13 of 16 13 3. Acquisition/Sale of 107‐109 S. Titus St. Property to INHS ― ResoluƟon Cummings noted she has two questions about the proposed project. She recalled when the two duplex properties were constructed, the reaction was positive, since they seemed as though they would be good family housing; however, they never became family housing. The entire block of houses surrounding the property has become increasingly fragile, so she was hoping they could be converted to owner‐occupied housing. Cummings wondered if INHS ever considered converting the property to owner‐occupied housing. She also asked how long the project would be required to be rental housing. Bohn explained the very same subject was brought up in an IURA Board Executive Session. The IURA Board also generally believed the property was most suitable for owner‐occupied housing; however, the particular units were ultimately not deemed to be ideal for that use. There were also concerns about what another buyer would do with the property, if INHS lost the opportunity to purchase it. When Bohn communicated the IURA Board’s conversation to INHS, INHS indicated it did in fact consider them for owner‐occupied housing, but that they did not meet the quality standards for inclusion in the Community Housing Trust (CHT). It would also be structurally difficult to successfully convert them into homeowner‐occupied units. In terms of how long they would remain rental units, they would most likely be required to be rental units for a long period of time (e.g., 50 years), once they are funded through Low‐Income Housing Tax Credits (LIHTC). Cummings indicated she does not agree with the premise that the properties would be better as rental housing. It would have been preferable to have had INHS participate in the Executive Session to make its case that the properties are not in fact suitable for owner‐occupied housing. Bohn noted Tracey Farrell was consulted on the proposal and initially held the same view as Cummings, but was eventually persuaded that the units were better suited to rental housing. Cummings asked what other Committee members think about the proposal. Schlather replied she is not familiar with the property. Rosario remarked he would prefer owner‐occupied housing, although he understands INHS’ analysis. Bohn noted the Committee should keep in mind that INHS would not proceed with the project, if it is required to be owner‐occupied, since it has no financing plan for that type of project, at this time. Cummings proposed including language in the resolution that does not immediately restrict the project to rental housing. She would like to keep the option open for converting it to owner‐occupied. She would also like INHS to provide site plans of the buildings to the IURA and walk through an analysis of the feasibility of owner‐occupied vs. rental housing. IURA GC Meeting Minutes April 17, 2020 Page 14 of 16 14 Rosario and Schlather agreed with the additional proposed language. Bohn indicated he would craft the exact wording as discussed and include it in the resolution. He will also provide site plans and other details of the property to the IURA Board and the Committee. Schlather moved, seconded by Cummings (as amended): Acquisition & Resale of 107‐109 S. Titus Street Property WHEREAS, two rental housing structures containing 12 bedrooms located at 107‐109 S. Titus St. are available for purchase, and WHEREAS, Ithaca Neighborhood Housing Services, Inc. (INHS), a 501(c)(3) entity, is interested to acquire this property to operate for affordable rental housing and be included in an assemblage of properties for a future scattered site low‐income housing tax credit project, and WHEREAS, INHS’ mission is to help people of modest incomes find—and stay in—high‐quality housing, and WHEREAS, INHS has successfully negotiated a purchase agreement for the property at a price of $562,000, and WHEREAS, 107‐109 S. Titus St. is located within the Urban Renewal Project Area, and WHEREAS, INHS agrees to purchase the property from the IURA under the following sales terms: Purchase Price: $562,000 Repayment Term: 15 years Amortization Term: 30 years Interest Rate: 100 basis points below market, with a minimum rate of 2.5%, fixed Down payment: $0 Closing Costs: added to principal balance of seller’s note Collateral: 1st mortgage Maximum Rents: affordable to households earning up to 100% of Area Median Income Tenant Income: unrestricted Affordability Period: 15 years, and WHEREAS, the IURA recently received over $800,000 when Cayuga Green, LLC repaid IURA loans, and WHEREAS, these non‐HUD funds are available for acquisition of property, and WHEREAS, acquisition and resale of 107‐109 S. Titus St. will advance the IURA’s affordable housing mission and create an income stream to the Agency, and IURA GC Meeting Minutes April 17, 2020 Page 15 of 16 15 WHEREAS, at its April 17, 2020 meeting, the IURA Governance Committee reviewed this matter and recommends the following; now, therefore, be it RESOLVED, the IURA hereby authorizes acquisition and resale of property at 107‐109 S. Titus St., Ithaca, NY to INHS subject to the above‐listed terms, and be it further RESOLVED, though the IURA understands that current State and Federal affordable housing programs offering deep subsidies are largely restricted to rental housing projects, INHS is requested to explore the feasibility and financial planning for how these rental units could potentially be converted to owner‐occupied dwellings enrolled in the INHS Community Housing Trust program, and share this information with the IURA, including the amount of local funding that would be necessary to raise, and be it further RESOLVED, the IURA Chairperson, subject to review by IURA legal counsel, is authorized to sign any and all documents to implement this resolution, including but not limited to accepting assignment of an executed Purchase and Sale Agreement for the property located at 107‐109 S. Titus Street. Carried Unanimously: 3‐0 VI. Other Business A. Review of IURA Financials: March 2020 Bohn reported virtually all HUD Entitlement Program projects are progressing well, except the following two delayed projects:  2018 Project 1: Neighbor to Neighbor Homeowner Rehab (CDBG) The project sponsor just completed one homeowner rehab project, but has experienced significant organizational challenges, delaying further progress. It has until the end of April 2020 to expend the remaining funds, or will be required to return them to the IURA.  2018 Project 18: Domestic Violence Center Renovation (CDBG) The project sponsor recently completed the project. Bohn reported all loan repayments are current, except the Finger Lakes School of Massage, which has been delinquent. He is attempting to collect the outstanding loan balance through a personal financial guarantee. Bohn reported all lease payments are current, as of today. IURA GC Meeting Minutes April 17, 2020 Page 16 of 16 16 B. IURA & Common Council Actions of Interest to Committee Bohn reported the IURA Board approved a resolution allocating $140,000 of economic development revolving loan funds to capitalize a COVID‐19 Micro‐Enterprise Resiliency Program, in partnership with Alternatives Federal Credit Union (AFCU), providing up to $5,000 in forgivable loans to for‐profit micro‐enterprises owned by a Low/Moderate‐Income (LMI) person (earning 80% or less of the Area Median Income adjusted for family size) that were in operation on February 15, 2020. A total of 105 applications were received. D. Staff Report ― CDBG‐CV Award Bohn reported that, as part of The Coronavirus Aid, Relief, & Economic Security (CARES) Act, additional CDBG funding (“CDBG‐CV”) was awarded to the City of Ithaca. The City was allocated $401,624.00, of which $321,299.20 would be available to fund projects. VII. Adjournment The meeting was adjourned at 10:48 A.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.