Clearwater, Florida, January 8, 2014

Clearwater, Florida, January 8, 2014 The Housing Finance Authority (HFA) Board of Pinellas County (as created by the Code of Ordinances of Pinellas County, Section 2-386) met in regular session in the Housing Finance Authority Conference Room, Bank of America Building, 600 Cleveland Street, Clearwater, Florida at 3:24 P.M. on this date with the following members present: Rodney S. Fischer, Chairman Tasker Beal, Jr., Vice-Chairman Norris E. Counts, Secretary/Treasurer Also Present Anthony M. Jones, Executive Director, HFA Karmen Lemberg, HFA Staff Sheri Harris, Bright Community Trust Bruce Bussey, Community Development Planning Section Manager Kim Balaskiewicz, KBLD, LLC, CPAs Michael T. Cronin, Attorney, Johnson, Pope, Bokor, Ruppel & Burns, PA Sue Denihan, Deniham & Associates, ehousingplus Tom Shelby, Sand Development, LLC Angela Crist, USF CRED Program Nico Karagosian, USF Foundation Scott Schuhle, U.S. Bank Helen Feinberg, RBC Capital Markets Kathryn Driver, RBC Capital Markets David Jones, CSG Advisors Gwendolyn Warren, Bureau Director, Health and Community Services Cheryl Reed, Assistant Director, Community Development Other Interested Individuals Trudy Futch, Board Reporter, Deputy Clerk 1. CALL TO ORDER AGENDA 2. APPROVAL OF MINUTES A. Housing Finance Authority Meeting Minutes of November 6, 2013 3. TREASURER S REPORT A. Financial Report General Fund (1) September 2013 (2) October 2013 1

B. Financial Report Trust Fund (1) September 2013 (2) October 2013 4. REPORTS BY OFFICERS AND OTHERS A. Single Family Program Update Karmen Lemberg B. Pinellas County Housing Foundation Sheri Harris 5. NEW BUSINESS A. County s At-Risk Communities 1. Memo 2. Resolution (Action Item) Anthony Jones B. Florida Institute of Government/Community Real Estate Development Program 1. Memo (Action Item) Anthony Jones C. Sadowski Education Effort 1. Memos (Action Item) Anthony Jones 6. OTHER BUSINESS A. Strategic Plan Update Mike Cronin 7. ADJOURNMENT Upcoming Events HFA Board Meeting Wednesday, February 5, 2014 at 3:00 P.M. CALL TO ORDER Chairman Fischer called the meeting to order at 3:24 P.M. and, at his request, those in attendance introduced themselves. A sign-in sheet has been filed and made a part of the record. MINUTES OF HFA MEETING OF NOVEMBER 6, 2013 APPROVED Upon presentation by Chairman Fischer, Mr. Beal moved, seconded by Mr. Counts and carried, that the minutes of the HFA meeting of November 6, 2013 be approved as submitted. 2

TREASURER S REPORTS APPROVED Financial Reports General Fund September and October 2013 Mr. Counts presented the HFA financial statements for the General Fund for the months ended September 30 and October 31, 2013, copies of which have been filed and made a part of the record; whereupon, he moved, seconded by Mr. Beal and carried, that the September and October General Fund financial reports be approved. Financial Reports Trust Fund September and October 2013 Mr. Counts presented the HFA financial statements for the Trust Fund for the months ended September 30 and October 31, 2013, copies of which have been filed and made a part of the record; whereupon, he moved, seconded by Mr. Beal and carried, that the September and October Trust Fund financial reports be approved. REPORTS BY OFFICERS AND OTHERS Single Family Program Update Ms. Lemberg provided an update regarding the Single Family Program, reporting that the 2012 A Bond is complete and the 2011 B Bond is nearly complete; and that 12 loans were closed last month and six have already come through this month. She indicated that she will be heading up the monthly presentations, which are being well received, noting that the realtors and the public like the Single Family Program, as the rates are very competitive. Pinellas Community Housing Foundation, Inc. Ms. Harris related that the name of the Pinellas Community Housing Foundation has been changed to the Bright Community Trust, and the new name will be used going forward. She gave an update on the inventory in the land trust, noting that the report covers October through December of 2013, and provided the following information: Three homes have sold, and two additional homes will close next quarter. Thirteen homes need rehabilitation. Four Neighborhood Stabilization Program (NSP) homes are under construction, five are on the market, and one is under contract. Thirty-four vacant lots are available. 3

The Foundation/Trust has partnered with Eco Village in Dunedin to help educate and qualify homebuyers for the new development, and six applications are in the pipeline awaiting new homes to be put on the market. The Foundation/Trust is currently renting townhomes at Creek Park and looking at designs and pricing to cut costs to fill the remaining vacancies. In response to queries by Mr. Counts, Ms. Harris indicated that there is interest in the vacant lots; and that Bright Community Trust will continue its partnership with Habitat for Humanity. She indicated that an open house is planned for the new office in February; whereupon, Chairman Fischer encouraged the members to view the new location. NEW BUSINESS County s At-Risk Communities RESOLUTION NO. 2014-01 OF THE HOUSING FINANCE AUTHORITY OF PINELLAS COUNTY, FLORIDA, ADOPTED, SUPPORTING THE GOALS AND OBJECTIVES OF PINELLAS COUNTY, FLORIDA TO PROVIDE DECENT, SAFE, SANITARY, AND AFFORDABLE HOUSING TO PERSONS OF LOW INCOME BY SUPPORTING THE INITIATIVES AND PROGRAMS OF PINELLAS COUNTY, FLORIDA IN TARGETING AT- RISK COMMUNITIES WITH THE GOAL OF ELIMINATING DESIGNATED AREAS OF POVERTY AND BLIGHT THROUGH COOPERATIVE EFFORTS Mr. Jones indicated that the resolution confirms that the HFA supports the initiatives and programs of Pinellas County in the targeted at-risk communities, as detailed in the agenda memorandum dated December 4, 2013, a copy of which has been filed and made a part of the record; whereupon, Mr. Counts moved, seconded by Mr. Beal, that Resolution No. 2014-01 be approved. In response to query by Chairman Fischer, Mr. Jones related that the resolution does not bind the HFA to fund anything in the area that it would not normally fund; and that while it sets priorities, all loans made must continue to go through the normal review process. Upon call for the vote, the motion carried unanimously. 4

* * * * Deviating from the agenda, Chairman Fischer indicated that Agenda Item No. 5.C, the Sadowski Education Effort, would be heard at this time. * * * * Sadowski Education Effort Mr. Jones discussed a request by the Florida Association of Local Housing Finance Authorities (ALHFA) for a $10,000 donation in support of activities intended to educate legislators on the Sadowski Act and other affordable housing issues. He related that previous donations have proved beneficial to the Authority, noting that it received approximately $800,000 of down payment assistance through the Attorney General settlement; whereupon, Mr. Beal moved, seconded by Mr. Counts and carried unanimously, that a $10,000 donation be made to the Sadowsky Education Effort. Florida Institute of Government/Community Real Estate Development Program Mr. Jones recommended that the HFA provide $35,000 in funding for the 2014 Community Development Real Estate (CRED) Program coordinated by the Florida Institute of Government (FIOG) at the University of South Florida (USF). FIOG Director Crist provided an overview of the program, and in response to query by Mr. Counts, related that no one has been turned away due to lack of space or any other reason. Thereupon, Mr. Counts moved, seconded by Mr. Beal and carried, that the HFA provide the funding as recommended by staff. Noting that this would be Mr. Jones last HFA Board meeting due to his impending retirement, Ms. Crist expressed her gratitude for his support throughout the years. OTHER BUSINESS Mr. Jones related that this will be the last HFA Board meeting he will attend, as his retirement will be effective at the end of the week. He expressed his appreciation for the 5

opportunity to work with such an impressive Board that has done so much good for the community, noting that he would be available on a volunteer basis. All the members expressed their appreciation of Mr. Jones dedicated, outstanding work, and Chairman Fischer attributed the leadership of Mr. Jones as one of the reasons this entity is recognized as the top Housing Finance Authority in the State of Florida, if not the entire southeast. appreciation. Thereupon, Ms. Feinberg presented Mr. Jones with a token of her teams Strategic Plan Update Upon the request of Chairman Fischer, Attorney Cronin provided historical background information regarding the HFA and its Board, and answered the following questions: Who is the Authority? The Authority is the entity that puts keys in the hands of the people. The strategic plan and mission of the Authority is to provide safe and decent housing appropriate to the needs of the residents of Pinellas County by assuring that financing of affordable housing remains available. What is the Authority? The Authority is a Special District created by state law. The powers of the HFA Board are given pursuant to state legislation, the ordinance adopted by the Board of County Commissioners (BCC) that created it, and the Rules of the Authority. Although the Board sometimes relies on its staff and advisors, the ultimate responsibility and authority lies with the Board, and the Board must keep the plan and mission statement in mind when making complex decisions. Where is the Authority at this Point in Time? The Authority has issued over $1 billion dollars of bonds since its inception. The Authority is a very well-respected issuer, a local issuer, and a national leader in the development of the Community Land Trust Program. Eighty percent of HFA s revenue and future cash flow is derived from single-family programs, which drive affordable housing initiatives. Attorney Cronin noted that two recent events have occurred that create a special challenge for the HFA: (1) the early retirement of Anthony Jones, its Executive Director and (2) the significant restructuring of the County government. He indicated that historically the HFA 6

Executive Director would report to the HFA Board, and the HFA Board would report to the Board of County Commissioners. Referring to a flow chart, he indicated that with the new County restructuring, the Executive Director would report to the Health and Community Services Director, pointing out that the restructuring triggered and was a significant factor in the accelerated retirement of Mr. Jones due to conflicts of interest that have been created. Attorney Cronin advised that, ultimately, the HFA Board will make the hiring decision as to who will be the new Executive Director, or chief financial officer, and what the Board s role and functions will be if it decides to move forward with an Administrative Agreement with Pinellas County, which has worked very well for many years. Thereupon, Ms. Warren clarified that she is the Community Development Director; that she replaced Mr. Jones, as well as two other Directors; that the reorganization was structural in nature in that it basically merged services in the areas of housing, infrastructure, and health and social services and placed them under one Director; and that she is in fact the Director of Community Development, the Director of Health and Human Services, and the Director of Code Enforcement. Continuing with the strategic planning update, Attorney Cronin pointed out that the Authority is at a crossroad, and that the HFA Board has three choices to achieve its objective in a cost efficient manner: 1. Operate essentially as a division of the Health and Community Services Department, utilize the resources made available by the County pursuant to the current Administrative Services Agreement, and report to the Department. 2. Operate as an autonomous and independent authority, which right is granted under State statute; self-fund; and not use the resources of the County. 3. Find a middle ground where the HFA uses certain resources of the County in an efficient manner to achieve its mission statement. In response to queries by Chairman Fischer and Mr. Beal, Attorney Cronin confirmed that the Authority has always been, in essence, an autonomous, stand-alone entity that has a relationship with the County through an Administrative Services Agreement, and discussed services the County, via the Agreement, has provided over the years, including office space, information technology support, employee benefits, accounting functions, and the HFA Executive Director and higher-level financial staff; whereupon, in response to query by the Chairman, he confirmed that the Authority pays the County for the provision of the services. 7

Thereupon, Attorney Cronin recommended the following action items: 1. Assemble a complete five-member Board as quickly as possible so that whatever decision the Board makes is a buy-in and decision of the full Board. 2. Begin a search for a permanent Executive Director, or at least a single-family program administrator with substantial HFA experience, whose primary responsibility is to work for and report to the HFA Board. 3. Do an analysis of the accounting/financing function to determine what is in the best interest of the Authority and the County. Discussion ensued regarding the difficulties caused by not having a full Board, including the lack of a quorum when one member is sick or otherwise not available, and Mr. Counts pointed out that Roger Broderick s name was forwarded to the BCC some months ago. Chairman Fischer related that the BCC is in the middle of changing its appointment process, but he has requested that Mr. Broderick be appointed now and the proposed process be followed for the next appointee, although the appointment must be made with the understanding that the Board is made up of professionals from certain segments of the housing industry. Ms. Warren stated that she would find out whether there is an official block on the HFA Board appointment recommendation or whether it was ever received by the County; that she has not seen the recommendation; and that the BCC would be concerned if it had been lost in the County s reorganization, as it considers the Authority one of its superstars. She related that she had planned to speak with the law department and BCC Chairman Karen Seel after the holidays to determine whether advertising could be waived, but had been unable to do so. She requested that the Board allow her to have that discussion with the County Administrator, the County Attorney, and the BCC Chairman, indicating that should the conversations go well, she would rush an emergency agenda item through this month; whereupon, Chairman Fischer indicated that whatever can be done to assure a full Board would be appreciated. Referring to comments made during the update, Ms. Warren indicated that she is unclear if the reason the Board wants a new member is to carry on its business or is to facilitate divorcing itself from the County, and discussion ensued wherein Attorney Cronin, with input by Mr. Counts, stated that a full Board facilitates the day-to-day business functions; and that there are bond transactions in the pipeline that are difficult to award without a full Board. Continuing with the update, Attorney Cronin indicated that the Request for Qualifications that has already been put together could be used as a guide to search for a permanent Executive Director, as it outlines the expertise, background, and qualifications 8

needed; and that the Board needs to decide whether to hire a CFO-type individual, given the complexity of the business. Mr. Counts stated that one of the priorities the Board set at its strategic meeting in April was to bring in a CFO that has experience with a Housing Finance Authority and knows the specific programs involved; and that he would not be comfortable with an accountant without that knowledge; whereupon, Attorney Cronin advised that a search committee be assembled. Attorney Cronin stated that the analysis of the accounting and financing function should determine if it would be in the best interest of the HFA, and the County, to outsource solely to the County or to continue with the current outsourcing and supplement it with County clerks. Ms. Warren stated that one person functioning as the Community Development Director and as Executive Director of the Trust is not only a conflict of interest, but a bad concept, noting that the HFA has been lucky through the years; and that she would recommend to the County Administrator that having a strong Executive Director that would be responsible for pushing the goals of the Authority and its partners is critical. She related that if the HFA Board decides to continue having a future partnership with the County, she would have concerns regarding the HFA handling federal contracts with its limited staff and consultants, as there are many regulatory requirements; and that if the HFA decides to be autonomous and disconnect from the County, the HFA would need to state its wishes to the BCC and make it official. She related that if the HFA Board decides that the Authority is to become independent, the County, because of its commitment to housing, would need to decide what support it could provide to help make the organization successful. Noting that there are many matters that must be considered due to the retirement of Mr. Jones, including bond issuance, policy direction, and legal decisions, Ms. Warren suggested the creation of a sub-committee consisting of the HFA Board, the BCC, and some of the County s top staff; whereupon, Chairman Fischer stated that no decisions would be made today. Mr. Counts related that there has never before been any conflict between the County and the HFA; that the Executive Director has always reported to the HFA Board; that while the County paid the salary of the Executive Director, it was reimbursed by the Authority; and that should the Executive Director be only concerned with the County and report directly to Ms. Warren, the HFA Board would in effect be unnecessary. Thereupon, Chairman Fischer directed Attorney Cronin to continue with the update, pointing out that there are decisions that only the HFA Board members can make that require a lot of consideration. 9

Acknowledging the complications in governmental reporting functions, Attorney Cronin indicated that he believes that County employees are currently completing the grant reporting, compliance work, and monitoring for the governmental compliance, which was confirmed by Ms. Warren; and that the HFA would prefer that it continue to be outsourced to the County. Ms. Warren indicated that the relationship has worked because of the trust between the HFA and the County, but that changes need to be made; that while Mr. Jones served as the Executive Director for the HFA, he at the same time managed County employees and the County department that loaned money to the HFA, which could be considered a conflict of interest as he legally held both jobs. She stated that she agreed, although for different reasons, that the HFA should hire an Executive Director, as Attorney Cronin advised, with the County continuing to supply contract resources; whereupon, upon confirming concurrence by all parties, Chairman Fischer, with input by Attorney Cronin, indicated that this would be spelled out in the new services agreement, and no objections were noted. Continuing with the strategic plan update, Attorney Cronin indicated that, as the HFA and County go through this transition, the momentum on single-family programs must be maintained, as they represent the majority of the HFA s revenue; and that lender relationships must be preserved. He recommended that a staff member be dedicated for this purpose and to sustain the marketing program, radio program, and outreach program. Attorney Cronin indicated that certain functions Mr. Jones performed would need to be managed in the interim, including wire draw requests, second mortgage reimbursement, down payment assistance, the on-line account with Regions Bank, consortium documents, and the execution of satisfactions of mortgages, and suggested that Pinellas County Director of Community Revitalization Cheryl Reed assume the responsibilities during the transition period. Ms. Warren stated for the record that she is extending the County s full commitment to work with the Board to make sure it has the resources and the staffing to make the transitions seamless, and discussion ensued with input by Ms. Warren regarding who she would appoint and how she would make the appointment; whereupon, Attorney Cronin advised that the Authority would have final approval. Chairman Fischer directed that all checks that go out and any functions that take place must have two signatures, one being an HFA Board member, and discussion ensued as to who would be the signators, with Ms. Lemberg providing clarification as to who has access and the necessary authority and suggestions as to how to achieve the routine, day-to-day functions; 10

whereupon, Attorney Cronin advised that all Authority members are authorized to execute a satisfaction of mortgage. Ms. Warren indicated that the HFA bank account is of no concern to the County; that the County is only concerned with contract awards that involve servicing loans with federal money attached, or signing off on funds that are jointly funded by federal program money; and asked that she be provided with a complete list of responsibilities of the Community Development Department versus the responsibilities of the Authority, confirmation that the HFA is satisfied with the County s management of its resources, and what assistance the HFA would need from the County, and discussion ensued. Chairman Fischer confirmed with the members and Attorney Cronin that nothing critical needs to be changed at this point in time; and directed that the HFA move forward with the process of finding an Executive Director and CFO, as has been approved by the Board, and no objections were noted. Thereupon, Mr. Counts moved, seconded by Mr. Beal, that Chairman Fischer be authorized to conduct the responsibilities normally required by the Executive Director. Ms. Warren confirmed that any responsibilities of the County would be carried out by Ms. Reed until she is officially appointed interim or the HFA makes a different selection. Ms. Balaskiewicz commented that the bulk of HFA funds are transmitted via wire and that the three authorized signers are County employees, which was confirmed by Ms. Warren, who cautioned that the Board not make significant changes without deliberation, as they may not understand what roles the two entities have been playing over the years. Ms. Balaskiewicz indicated that from an internal control perspective, there is a dual role, which is being performed by County employees, and expressed support for Chairman Rodney serving as the second person on the wire capability and Ms. Reed acting as the Interim Director. Following discussion, Chairman Fischer, with input by Attorney Cronin, directed that an Authority member sign off on cash, wire transfers, and checks, and no objections were noted; and Ms. Warren confirmed that Cheryl Reed, with Bruce Bussey as her assistant, would be responsible for the day-to-day functions that Mr. Jones previously handled. Chairman Fischer indicated that the next order of business for the Board would be to hold a public meeting to discuss the current Board vacancy and the three options outlined by Attorney Cronin, and asked that all members be in attendance; whereupon, Ms. Warren suggested that before scheduling the public meeting, Chairman Fischer meet with the County 11

Attorney and the County Administrator, as it would be a significant departure from the current partnership; and in response to query by Chairman Fischer, indicated that she was referring to County Attorney Jim Bennett, not Chief Assistant County Attorney Dennis Long. Thereupon, upon the Chairman s call for the vote, the motion to authorize Chairman Fischer to conduct responsibilities normally required by the Executive Director carried unanimously. Ms. Warren inquired as to the intent of the Chairman regarding the public meeting, and Chairman Fischer indicated that the Board would discuss the vacancy and make a decision as to the direction the Authority would take going forward; whereupon, he directed Ms. Lemberg to move forward with scheduling the meeting. In response to query by Mr. Beal, Ms Warren confirmed that she would look into the circumstances surrounding the issue of the recommendation sent to the BCC for the HFA Board appointment and try to move it forward. ADJOURNMENT Chairman Fischer announced that the next meeting would be held on Wednesday, February 5, 2014, at 3:00 P.M.; whereupon, upon motion by Mr. Counts, seconded by Mr. Beal and carried, the meeting was adjourned at 4:46 P.M. Secretary/Treasurer 12