MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS

Wednesday, June 8, 2016

The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee was held pursuant to public notice on Wednesday, June 8, 2016.  The published meeting time was 12:00 Noon.  The meeting was held at the Board office, 65 Union Avenue, Suite 1120, Memphis, TN  38103.

    The following Directors were present:
                        
        Lee Patton                     Carolyn Head
        Monice Hagler             Buckner Wellford
        Daniel Reid                    Carolyn Goodwin-Willett
        Nancy Willis                     
                            
    The following Directors were absent:

        Curtis Thomas                    Paige Walkup
    
    Also present were:

Staff members Martin Edwards and Lauren Magallanes, and Charles Carpenter, General Counsel. Also present were Stan Sawyer and John Hatcher of Banks, Finley, White & Co., CPAs, independent auditors; Maria Zamudio of the Commercial Appeal; and Zaneta Lowe, of WREG-TV3.  

With a quorum present, the regular meeting of the Board was called to order at 12 Noon by the Chair, Daniel Reid. 

Nancy Willis noted a correction to the May 4 meeting minutes regarding the duplication of her name within the motion for the PILOT extension for South Main Artspace Lofts. 

Approval of Minutes
Buckner Wellford moved for approval of the Minutes for May 4, 2016, as amended. Lee Patton seconded and the motion passed unanimously. 


Review of Audit for the Year Ended December 31, 2015
Stan Sawyer and John Hatcher of Banks, Finley, White & Co., CPAs entered the meeting. Thereupon, the annual audit report for FY2015 was distributed to the members. Stan Sawyer presented the audit to the Board and confirmed that it was a clean audit with no findings cited. Thereafter, there was a brief question and answer session with members of the Board. 

Motion
Lee Patton moved for acceptance of the Audit for the Year Ended December 2015. Monice Hagler seconded and the motion passed unanimously.

Finance Committee Report
Lee Patton reported on the Financial Statements for the period ending April 30, 2016. He provided summaries of the income statement and balance sheet for the period and year to date. Buckner Wellford inquired as to the performance of the investments of the Board. Patton responded that pursuant to the Board’s investment policy, the finance committee has been in touch with its financial advisors and is scheduling its annual review. Further, he advised that the last recommendation from the investment advisors was to hold on making changes at that time. Patton stated that special attention is being paid to this area due to the volatility in market conditions.  

Motion
Carolyn Goodwin-Willett moved for acceptance of the Finance Committee Report for April 2016. Carolyn Head seconded and the motion passed unanimously.

Attorney’s Report
Charles Carpenter reported one new claim in connection with Uptown Manor Apartments, an existing PILOT property. Based on his preliminary review, the claim was proceeding and should be satisfied and dismissed in the normal course. Carpenter further reported that he had received a Revised Notice of Default for Hilldale Apartment project bonds as well as a demand for remittance of project revenues, both documents had been publically disseminated through EMMA. Carpenter presented the Hilldale Apartments project bond status for informational purposes only. 

Carpenter reported one PILOT closing for Eastwood Park apartments. Carpenter also reported the legal termination of two of the five Memphis Land Bank PILOT projects, (i) Lyons Ridge Apartments and (ii) Village Parkway Apartments. Carpenter added the remaining three Memphis Land Bank PILOTs would remain in the PILOT program. 

Carpenter reported successful closings had taken place for the PILOT transfers of Winbranch Apartments and Grahamwood Apartments. Further, Carpenter reported that PILOT document modifications have been completed for Annie’s Townhomes and Lantern Square Apartments, due to mortgage refinancings with new lenders. 

Carpenter reported that Uptown Manor Apartments which have a bond and PILOT has acquired a new lender and intends to redeem the outstanding bonds. Notwithstanding the bond redemption, the land use restriction agreement associated with the property will remain for the fifteen year compliance period. 

Carpenter reported during the previous month he had provided assistance to staff in reviewing and proposing revisions to the (i) PILOT Application, (ii) PILOT Transfer Application, (iii) Bond Application and related processes with each application. Carpenter also provided assistance to the auditors in the completion of the audit. Also, Carpenter reported his confirmation of the Open Meetings Act, specifically regarding executive sessions, and stated that in order to call the meeting into executive session, discussion must involve legal matters, proprietary information or trade secrets. Carpenter also advised that matters which involve litigation or matters that may lead to litigation are appropriate for executive session. Carpenter added these same practices are being used by the City of Memphis and have been confirmed with the City Attorney’s office. Buckner Wellford asked if legal advice question(s) might be considered for executive session, to which Carpenter responded if the question(s) relate to litigation or may lead to future litigation, only then would an executive session be appropriate. 


Action Items


Martin Edwards provided an introduction to the proposed policy and application changes for the (i) PILOT application and process, (ii) PILOT transfer application and process, as well as, (iii) bond application, submitted to the Board for its consideration and vote. Edwards and Carpenter shared with the Board the intentions behind the recommended modifications for each application, which would clarify in most cases and allow added benefit to the Board through enhanced compliance monitoring and enforcement, as well as encouragement of communications among agencies, such as Code Enforcement, the Department of Housing and Urban Development, and the Tennessee Housing Development Agency.   


CONSIDERATION OF PILOT TRANSFER APPLICATION POLICY REVISIONS
Nancy Willis suggested the word “time” be added to the project refinancing section of the proposed revisions, to read “...at which time the continuation will be considered.” Buckner Wellford asked if an issue has ever arisen regarding stated reasonable attorney fees, to which Charles Carpenter responded it has not been an issue, and added that the charge of fees is to the borrower/lender for any legal assistance, not to the Board. 

Motion
Carolyn Head moved for acceptance of the PILOT Transfer Application Policy Revisions, as amended, to include the word “time” under Project Refinancing. Monice Hagler seconded and the motion passed unanimously. 

CONSIDERATION OF PILOT APPLICATION POLICY REVISIONS
Martin Edwards referenced the previously discussed noted revisions located in the Board packet. Charles Carpenter added revisions further clarify deficiency notices for the PILOT, in addition to REAC inspection report(s) and refinancing policy implementation.  Nancy Willis asked if the applicants are made aware of acceptable tenant benefits, to which Carpenter responded positively, as they are listed in the application as well as reviewed with the applicant during the pre-submittal conference. 

Motion
Monice Hagler moved for acceptance of the PILOT Application Policy Revisions, as amended, to include the word “time” under Project Refinancing. Nancy Willis seconded and the motion passed unanimously. 

CONSIDERATION OF BOND APPLICATION POLICY REVISIONS
Martin Edwards referenced the previously discussed noted revisions located in the Board packet regarding the submission requirement of REAC inspection reports or any other related report. Bucker Wellford suggested removing “conclusion” from the application changes to provide further clarity for the applicants. 

Motion
Buckner Wellford moved for acceptance of the Bond Application Policy Revisions, as amended, to remove the word “conclusion”. Monice Hagler seconded and the motion passed unanimously. 

Buckner Wellford asked to re-open the previous motions for the PILOT application policy revisions as well as the PILOT transfer application policy revisions, to include the removal of “conclusion” from the suggested changes to the applications under REAC report(s) submission.

Motion
Buckner Wellford moved for amendment of the previous acceptance of the PILOT Application Policy Revisions and PILOT Transfer Application Policy Revisions to remove the word “conclusion”. Monice Hagler seconded and the motion passed unanimously. 


Carolyn Head asked what consideration the Board gives to applicants that own multiple properties and the conditions therein, to which Daniel Reid responded positively adding that the Board makes an effort to look at the whole relationship to encourage growth.  Charles Carpenter added applicants have been turned down due to the condition of other projects under their control and the entire experience with the developer is taken into consideration. Martin Edwards added that an understanding of all the applicant projects is a part of the interview process for a PILOT application. Daniel Reid invited and encouraged the Board to participate in an upcoming webinar on understanding REAC inspections. 

CONSIDERATION OF ONLINE DATABASE DISCLOSURES
Martin Edwards brought forth for consideration, due to multiple requests, to provide online meeting minutes and agendas available to the public for up to one year. Charles Carpenter added the matter might be handled administratively, without the requirement of a formal motion. The Board responded positively. 

 

There being no further business, the meeting was adjourned by the Chair at 1:03 p.m.

 

______________________________            ______________________________
Daniel Reid, Chair                                      Monice Hagler, Secretary