7/23/2009

HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO Minutes of Commission Meeting Thursday, July 23, 2009

440 Turk Street San Francisco, California

A Regular meeting of the Housing Authority Commission of the City and County of San Francisco met at 440 Turk Street, San Francisco, California, on Thursday, July 23, 2009, at 4:00 p.m.

President Brown called the meeting to order at 4:05 p.m.

1. ROLL CALL PRESENT:

Neola Gans, Vice President George R. Brown, Commissioner Jane Hsu, Commissioner Matthew Schwartz, Commissioner

NOT PRESENT:

Rev. Amos Brown, President Millard Larkin, Commissioner(excused) Dwayne Jones, Commissioner (excused)

A quorum was present.

ALSO PRESENT: 2.

Mr. Henry A. Alvarez, Executive Director Mr. Roger Crawford, Acting HR Director

APPROVAL OF AGENDA Commissioner Schwartz motioned to approve the agenda. Commissioner Brown seconded the motion. The agenda was approved unanimously.

3.

GENERAL COMMUNICATIONS/ REPORT OF SECRETARY Mr. Henry Alvarez, Executive Director informed the Commission that they can find HUD correspondence and the SFHA Shooting Incident report. Mr. Alvarez informed the Commissioners that he attended the NAHRO Conference in Portland, Oregon and that the SFHA was well received especially during our transit orientated development presentation.

Commission Meeting Minutes July 23, 2009 Page 2 Commissioner Brown wanted information on the number of families still in SFHA as a result of Hurricane Katrina. Mr. Alvarez informed the Commissioners that there were three families that we will be presenting vouchers to.

4.

COMMITTEE REPORTS There were no Committee Reports.

5.

REPORT OF GENERAL COUNSEL Mr. Roger Crawford, Acting Director of Human Resources informed the Commission that there would be a Closed Session.

6.

TENANT REPRESENTATIVE REPORT Mr. Vitalie was not present at this meeting.

Kimberly Hill-Brown, President of the Tenants Association, informed the Commissioners of several items including issues with PHTA, elections and resident concerns.

7.

PUBLIC COMMENT ON AGENDA ITEMS There were no public comments.

8.

UNFINISHED BUSINESS There was no unfinished business.

9.

NEW BUSINESS

A) CONSENT AGENDA 1) APPROVAL OF MINUTES OF JUNE 11, 2009 2) RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO A MEMORANDUM OF UNDERSTANDING WITH THE CITY AND COUNTY OF SAN FRANCISCO (CCSF) HUMAN SERVICES AGENCY TO EXPAND RESIDENT HIRING OPPORTUNITIES. 3) RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO SUBMIT A FUNDING APPLICATION TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR HOUSING CHOICE VOUCHERS IN RELATION TO APPROVED DEMOLITION APPLICATION DDA0003309

Commission Meeting Minutes July 23, 2009 Page 3 Commissioner Schwartz motioned to approve the Consent Agenda. Commissioner Hsu seconded the request. The Consent Agenda was approved unanimously.

B) ACTION ITEMS 1) RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO RELATED AGREEMENTS WITH CREWS & ASSOCIATES AND STANDARD & POOR’S TO FACILITATE THE ISSUANCE OF NOT MORE THAN $33,000,000 IN BONDS, OR OTHER SUITABLE FINANCIAL INSTRUMENTS, NECESSARY TO FUND THE IMPROVEMENTS ASSOCIATED WITH THE AMERESCO ENERGY SERVICES AGREEMENT PREVIOUSLY AUTHORIZED BY THE COMISSION AND COSTING $61,000 IF THE TRANSACTION DOES NOT CLOSE. George Gager, MOD/HD Manager, Janice Debarose from Ameresco, Mark Brown and Edmund Hurst from Crews& Associates presented this Resolution.

This resolution authorizes the Executive Director to sign an Investment Banking Engagement Letter with Crews & Associates (Crews) in substantially the form attached (Attachment I) hereto, to obtain the financing needed to fund $27.5 Million in energy-related improvements pursuant to the Energy Services Agreement (ESA) with Ameresco. As required in its Agreement with the San Francisco Housing Authority (SFHA) Ameresco has solicited proposals from more than 9 qualified investment banking firms and other commercial lenders to provide financing for the proposed energy-related improvements to the SFHA Low Income Public Housing (LIPH) inventory. Crews & Associates was the only qualified bidder to respond to Ameresco’s solicitation.

In order to facilitate this financing as proposed by Crews, the Authority must obtain an Issuer Credit Rating to facilitate the sale of up to $33 million in bonds.

This resolution also authorizes the Executive Director to sign an Engagement Letter with Standard & Poor’s in substantially the form attached (Attachment II) hereto, as the Credit Rating Agency included in Crews proposal to Ameresco and the San Francisco Housing Authority. This Rating will be essential as a key element in the joint decision made by Crews and SFHA whether to utilize the taxadvantaged Build America Bonds, Tax-Free Certificates of Investment, or conventional taxable debt. Even though the activities of the SFHA are federally funded, the status of the budget and finances of the State of California will have an impact on rate which the authority will pay for this financing.

At this time the projected interest rate for the SFHA transaction is 5.398%, although the rate for the Bridgeport Housing Authority was 5.498%, however, variables resulting from the S&P Rating and market fluctuations make it impossible to precisely determine the actual interest rate, required interest reserves, and Transactional Costs until the bonds or other financial instruments are actually offered and sold in the marketplace.

If for some reason this financing and the ESA are not completed, SFHA will be exposed to costs which it would need to fund out of its Capital Budget. Of theses costs the Board has already approved $55,000 to pay Ameresco for its energy study. Additional fees would need to be paid to

Commission Meeting Minutes July 23, 2009 Page 4 Crews to cover their outside legal fees and expenses and Standard & Poor’s, having completed their work, would need to be paid $61,000.

When successfully implemented and maintained, this program will provide for all of the principal and interest on these bonds to be paid for out of the energy savings derived from the ESA with Ameresco. The proposed Energy Services Contracting project financing would be entirely amortized by the utility cost savings generated which are guaranteed by the Energy Performance Contract for the full term of the 20 year term of the financing.

A tax-exempt municipal lease has been proposed by Ameresco and Crews.

This is the most common financing structure used and must be submitted to HUD as part of the project approval process. Under this lease SFHA would own the installed equipment following its installation and the Lessor or investor would retain a security interest (lien) on the equipment until the capital lease is paid in full at the end of the lease term. Ameresco will also continue to work in collaboration with SFHA to secure additional conservation incentives. These rebates may be used by the SFHA to fund additional improvements or reduce or pre-pay the debt on the project. By entering into this transaction, SFHA will also be able to qualify for more than $30 million in Capital Fund Recovery Competition (CFRC) Grants.

Commissioner Schwartz wanted clarification on whether Crews& Associates acts as the lender or the underwriter in this transaction. Mr. Hurst informed the Commissioner that Crews & Associates acts as an underwriter.

Commissioner Schwartz questioned why the underwriters’ fee is quoted at 60 bases points as compared to an estimated standard fee of 20 bases points. Mr. Hurst explained that the fee is based on the integrity of the firm. He went on to explain that Crews& Associates takes extra measures that other companies may not take in order to procure the best interest rate.

Commissioner Brown wanted clarification on the cost associated with not closing this deal. Ms. Debarose informed the Commission that in the event that the deal doesn’t take place, the authority agrees to cover the costs for a total of $61,000.

Ms. Smith informed him that the Ameresco fee of $55,000 was approved by the Commission for the total energy services contracting. There is a total of $90,000 in potential fees that we would pay if the financing doesn’t go forward.

Commissioner Brown wanted information on the ownership of the equipment described in the lease. Mr. Hurst informed the Commissioner that it was typical to have collateral in a transaction such as this one and that the likelihood of having to come and take the equipment is very small.

Commissioner Brown also wanted to know if the SFHA General Counsel has looked into this transaction. Tim Larsen, Acting General Counsel informed the Commissioners that the draft agreements were reviewed but we were no where near finalizing the transaction. He informed the Commission that if the Resolution was approved the SFHA would enter into aggressive negotiations.

Commission Meeting Minutes July 23, 2009 Page 5 Mr. Larsen also informed the Commissioners that they can vote to amend the Resolution, requiring that staff come back with more details once the agreement was finalized.

Commissioner Schwartz made a motion to amended the Resolution to require that the Executive Director and staff come back to the Commission after negotiations with as much information as can be compiled stating that the price that the SFHA is being offered is reasonable in the market at this time. He suggested coming back with the last ten bond offerings of this time that have gone over nationally and/or pending HUD approval. He also suggested, not as part of the Resolution, staff looking into low income tax and had a reference for a law firm that he has worked with. Lastly, Commissioner Schwartz wanted to make sure that no money was allocated to Standard & Poors until the Crews & Associates transaction was completed. With that, Commissioner Schwartz motioned to approve this Resolution as amended. Commissioner Brown seconded the motion. This Resolution was passed unimously.

2)

RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO (“AUTHORITY”) MAKING FINDINGS AND DECLARING OVERRIDING CONSIDERATIONS REQUIRED PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, AND AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO (1) A MASTER DEVELOPMENT AGREEMENT BETWEEN THE AUTHORITY AND HUNTERS VIEW ASSOCIATES, L.P. (“DEVELOPER”), AND (2) A PREDEVELOPMENT AND CONSTRUCTION LOAN AGREEMENT BETWEEN THE AUTHORITY AND THE DEVELOPER IN CONNECTION WITH THE HUNTERS VIEW PUBLIC HOUSING SITE Barbara

Smith,

MOD/HD

Administrator

presented

this

Resolution.

Revitalization of Hunters View is the first to be funded under the City and County of San Francisco (“City”) HOPE SF Program. The City, the Agency, and several other lenders have provided Predevelopment Loans to assist in revitalization of the property. The Authority determined that it can best meet the needs of the existing Hunters View residents by entering into a partnership with a developer to create a new viable mixed-income community, with one-for-one replacement of the public housing under the US Department of Housing and Urban Development’s mixed-finance regulations.

The objective of this resolution is to authorize execution of a Master Development Agreement and the Predevelopment and Construction Loan Agreement between the San Francisco Housing Authority and Hunters View Associates, L.P. for revitalization of Hunters View, the physically obsolete 267 unit public housing site located at 112 Middle Point Road.

The property to be revitalized also includes a contiguous parcel, owned by the San Francisco Redevelopment Agency that will be conveyed to the Authority and then conveyed to the Developer.

Commission Meeting Minutes July 23, 2009 Page 6 By approving this resolution, the Authority is also acknowledging it: (1) has reviewed and considered the environmental effects of the Development as indicated in the Environmental Impact Report (“EIR�) and approved by the Planning Commission; (2) adopts the EIR findings; and (3) adopts the Mitigation Monitoring and Reporting Program (see Exhibits A and B).

Both the MDA (Exhibit C) and PCLA (Exhibit D) are in substantially final form, subject to U.S. Department of Housing and Urban Development (HUD) review and approval.

Upon execution of the Master Development Agreement and the Predevelopment and Construction Loan Agreement, the Authority will begin to negotiate the terms and conditions of the Disposition and Development Agreement and Ground Lease for Phase 1. Also, critical financing from the Authority will be available to the Developer for planning, demolition, infrastructure and dwelling structures.

Commissioner Brown questioned the amount of construction going on on site. Ms. Smith informed the Commissioners that the force account crews are fixing up units in the Phase 2 and Phase 3 areas so there is quite a bit of construction on site. Commissioner Brown also wanted information on the sub-contractors. Ms. Smith informed him that there has not been any work done by the contractor on site but the Development Team in required to comply with the SFHA and the Redevelopment Agencies MBE/WBE and resident hiring requirements.

Commissioner Brown wanted clarification on the parcel being given to SFHA by the Redevelopment Agency. Ms. Smith informed the Commissioners that it was a rocky outcropping on the eastern part of the property that will be handed over to the SFHA. Commissioner Brown motioned to approve the Resolution. Commissioner Schwartz seconded the motion. This Resolution was passed unanimously.

3)

RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO A MEMORANDUM OF UNDERSTANDING BETWEEN THE SAN FRANCISCO HOUSING AUTHORITY AND THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NUMBER 6 Roger Crawford, Acting Director of Human Resources presented this Resolution.

Under the provisions of the Government Code Sections 3500 et seq. (MeyersMilias-Brown Act), bargaining representatives of the San Francisco Housing Authority (SFHA) and the International Brotherhood of Electrical Workers (IBEW) Local Number 6 met on several occasions and tentatively agreed to enter into a Memorandum of Understanding (MOU), re-establishing a direct collective bargaining relationship between the parties.

Commission Meeting Minutes July 23, 2009 Page 7 The MOU provides the collective bargaining framework for the continued relationship between SFHA and IBEW Local Number 6. The MOU covers approximately nineteen (19) employees at present, six (6) who work in the Maintenance Division and thirteen (13) who are in Force Accounts. It ensures that the terms and conditions of employment, including compensation and fringe benefits, are clear for both labor and management.

SFHA benefits by having a labor agreement through September 30, 2011, ensuring continuity of work performed. Local 6 members benefit by having clear, unambiguous terms and conditions of employment.

Additionally, during these negotiations and through other discussions, the parties have resolved all grievances that arose under the Inside Wireman’s Agreement.

Commissioner Brown wanted to know if the union has voted on agreement. Mr. Crawford informed him that the union had voted on the agreement and approved it. He also wanted to know the term of the contract. Mr. Crawford informed him that this was a two year contract.

Commissioner Brown motioned to approve this Resolution. Commissioner Schwartz seconded the motion. The Resolution was approved unanimously.

4)

INFORMATIONAL PRESENTATION- PROPOSED UPGRADES TO THE HOUSING AUTHORITY’S INFORMATIONAL TECHNOLOGY SYSTEMS David Rosario, Director of IT presented this Information presentation. On May 28, 2009 staff received approval from the Board to pursue an RFP to upgrade its existing computer hardware and software. During that presentation regarding the RFP, IT informed the Board of the dire need of the Agency to improve its technology. Since that time IT has continued to take steps toward improving the Agency’s technology.

Mr. Rosario went on to share a PowerPoint presentation that will be given to staff in the coming weeks on the new technology that IT plans to implement.

10.

PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA Public comments were heard by the following: Bobby Washington Vowitta Logan Pam Jackson Jesse Mason Terry Anders Sharon Hewitt Laurel Moeslin Deva Youngblood

Commission Meeting Minutes July 23, 2009 Page 8

11.

COMMISSIONERS COMMENTS AND REPORTS There were no Commissioner Comments and Reports.

12.

CLOSED SESSION A Closed Session was scheduled with the Executive Director and Agency Counsel under Government Code Section 54957(b)(1), 54956.9, 54957.6 to update the Commission on personnel issues, pending litigation and labor negotiations. The Commission went into Closed Session at 6:00 p.m. Present were Vice President Gans, Commissioner Hsu, Commissioner Schwartz and Commissioner Brown. No decisions were made.

14.

ADJOURNMENT There being no further business to come before the Commission, Commissioner Schwartz motioned to adjourn the meeting. Commissioner Brown seconded the motion. Vice President Gans adjourned the Commission Meeting of July 23 2009, at 6:41 p.m.

Henry A. Alvarez, Secretary/ Executive Director

Neola Gans, Vice President