HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO. General Public Comment on Items Related to Development and Finance Committee

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1 HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO DEVELOPMENT AND FINANCE COMMITTEE MEETING January 12, 2016 COMMISSIONERS PRESENT: Phil Arnold, Chairman Jaci Fong, Committee Member Lottie Titus, Committee Member arr: 9am COMMISSIONERS EXCUSED: Item 1. Item 2. Call to Order Chairman Phil Arnold called the meeting to order at 8: 42 am. Approval of Minutes December 15, 2015 Chairman Arnold referred to the third paragraph on Page 7 of the January 12, 2016 Committee Book and requested that 200 Polk Street be changed to 200 Paul Street. Item 3. First: Commissioner Arnold motioned to approve as amended Ayes: Commissioners Arnold and Titus Nays: General Public Comment on Items Related to Development and Finance Committee Commissioner Arnold requested to move to Standing Item C: Budget to Actuals Item 6. Standing Item C. Budget to Actuals Acting Executive Director, Barbara Smith, reported that Budget Maestro is the new software being used for Budget to Actuals. She added that there will be Budget Maestro training at the end of January She reported that all of the general ledger information has been migrated to Emphasys. She stated that more detailed Budget to Actuals reports will be available once Budget Maestro goes live. She reported that the Authority is $26,000 off from the Housing Choice Voucher. She stated that a lot of problems were found with payroll, making the Central Office Cost Center (COCC) appear negative in the HUD Financial Data Schedule (FDS) submission; however, Public Housing was positive in the FDS submission. Commissioner Arnold asked if the U.S. Department of Housing and Urban Development (HUD) had accepted FDS. Ms. Smith responded that HUD had not rejected the FDS. Commissioner Arnold asked if assistance would be needed. Ms. Smith responded that Casterline Associates is providing assistance, and the FDS reconciliation would be completed. Commissioner Arnold

2 stated that there are City officials standing by to provide assistance if needed. Commissioner Arnold asked if a Budget to Actuals report would be available next month. Ms. Smith responded in the affirmative. Commissioner Arnold asked to move to Finance Item three (3). Item 5. Finance Item (3)RESOLUTION APPROVING THE EXPENSE TO PAY EXTRATEAM FOR THE UPGRADE TO THE HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO'S CURRENT CISCO VOICE OVER IP (VOIP) TELEPHONE SYSTEM TO THE LATEST RELEASE OF CISCO IN THE AMOUNT OF $52,424.35] Presented by: David Rosario, Director, Information Technology Commissioner Arnold asked Chief Procurement Officer; Solomon Gebala, to comment on the procurement for this item. Mr. Gebala responded that the use of technology to re-procure an entire new network or servers would be severely cost detrimental to the Authority. He added that replacing the infrastructure would cost $160,000 and that the Authority cannot rely on any state contracts. Commissioner Fong asked if this would be a software update instead of a system update. Information Technology (IT) Director; David Rosario responded that updates were exhausted. Commissioner Fong asked if there was another Cisco authorized dealer that could provide the same upgrade. Mr. Rosario responded that Cisco guaranteed that the lowest price would be from Extrateam. Commissioner Arnold asked if HUD would be okay with this procurement. Mr. Gebala responded in the affirmative and that there is an IT clause in the Cisco contract which addresses this issue. Commissioner Arnold asked for the fund source. Mr. Rosario responded that the fund source is capital funds. Public Comment (s) First: Commissioner Fong motioned to recommend approval of the item to the Board of Commissioners and that it be placed on the Consent Calendar Nays: Item 4. Commissioner Arnold asked to move to Development Item one (1). Development Items (1) [RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR OF THE HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO ("AUTHORITY") TO EXECUTE COMMITMENT LETTERS OF AUTHORITY SELLER CARRYBACK FINANCING AND PERMANENT FINANCING FOR THE

3 FOURTEEN (14) RAD PHASE II PROJECTS, AS REQUIRED BY FINANCING APPLICATIONS TO THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE AND THE CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE THAT WILL BE SUBMITTED IN FEBRUARY 2016] Presented by: Modernization Tessa Kaneene, Senior Project Manager, Housing Development and Commissioner Arnold asked if the Mayor s Office of Housing and Community Development (MOHCD) contributed funds. Lydia Ely from MOHCD responded that MOHCD had contributed $40 million to RAD Phase I and would contribute the same amount to RAD Phase II. Commissioner Arnold asked if $1.2 billion was the current accurate estimated cost. Ms. Ely responded in the affirmative and added that there are three (3) projects with over $15 million of rehab costs, as well as several high rises. Commissioner Arnold asked if there was any worry that any properties would fall off of RAD Phase II due to financial deficiency. Ms. Ely responded in the negative. Commissioner Arnold asked if there was a chance of delay in the August 2016 closing date. Ms. Ely responded that MOHCD is hoping to close as scheduled. Commissioner Arnold asked if this was the preliminary commitment letter or the actual agreement. Ms. Ely responded that the actual loan documents would come back with Commission s approval, including the ground lease. First: Commissioner Titus motioned to approve recommend approval of the item to the Board of Commissioners and that it be placed on the Consent Calendar Second: Commissioner Fong Nays: (2) [RESOLUTION APPROVING AND AUTHORIZING THE ACTING EXECUTIVE DIRECTOR OF THE HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO (THE "AUTHORITY") TO ENTER INTO (1) AN AIR RIGHTS LEASE AGREEMENT BY AND BETWEEN THE AUTHORITY AND ALICE GRIFFITH PHASE 3A, L.P. (THE "PHASE 3A LESSEE"), (2) AN AIR RIGHTS LEASE AGREEMENT BY AND BETWEEN THE AUTHORITY AND ALICE GRIFFITH PHASE 3B, L.P. (THE "PHASE 3B LESSEE"), (3) OTHER DOCUMENTS CONTEMPLATED BY SUCH LEASES FOR THE CONSTRUCTION AND DEVELOPMENT OF THE THIRD PHASE OF THE ALICE GRIFFITH REPLACEMENT HOUSING DEVELOPMENT, AND (4) GROUND LEASES AND OTHER DOCUMENTS NECESSARY FOR SUBSEQUENT PHASES OF THE ALICE GRIFFITH REPLACEMENT HOUSING DEVELOPMENTS] Presented by: Toni Autry, Project Manager, Housing Development and Modernization

4 Commissioner Arnold stated that inadequate time had been provided to review the lengthy resolution. He asked if the Resolution would approve all future documents. General Counsel Dianne Jackson McLean responded in the affirmative. She explained that with the exception of the Air Rights Parcel documents, the documents would be the same as previously approved. Project Finance Vice President at McCormack Baron Salazar; Daniela Greville, provided an overview of Alice Griffith Phases 3A and 3B Projects. Commissioner Arnold asked if public housing residents would be placed throughout the building or in a designated section of the building. Ms. Greville responded that public housing residents would be spread throughout the building. She added that it would be a mixed public housing and tax credit unit building. Commissioner Fong asked if this kind of parceling was common. Ms. Greville responded that it was not common but that the Authority had done it on a recent transaction. General Counsel Jackson McLean added that it is done in San Francisco and throughout the state. Commissioner Arnold asked what happens to the additional $13 million obtained by having the Air Rights Parcel structure for the projects. Ms. Greville responded that it is equity into the projects. Commissioner Arnold asked if it was additional equity that was not predicted. Ms. Greville responded that the City would not have to invest these funds into the projects and would has additional funds to spend on additionally affordable housing throughout the City. Commissioner Arnold asked if there was an opportunity to increase the number of RAD units or Section 8 units at Alice Griffith. Elizabeth Colomello from the Mayor s Office of Community Investment and Infrastructure (MOCII) responded that the unit numbers for Alice Griffith were set and would be difficult to change. Commissioner Arnold asked for further explanation on the documents mentioned in paragraph three (3) of the Resolution. General Counsel Jackson McLean responded that the documents would include the purchase option agreement and identified several other documents. She added that the documents are almost identical to the documents in Phase I and II. Commissioner Fong asked where those documents are found in the Staff Report. General Counsel Jackson McLean responded that they are found on Page 6. Commissioner Arnold suggested removing paragraph four (4) from the Resolution, which provided the Acting Executive Director the authority to approve documents for future phases of the Alice Griffith Projects, and submitting the Resolution to the Board of Commissioners without a recommendation. He added that he would like the entire Board of Commissioners to hear a full presentation, which should include information regarding the opportunity to increase the number of public housing units at the January 14, 2016 Board of Commissioners meeting. Public Housing Tenants Association (PHTA) President; Joyce Armstrong, stated that she appreciates Commissioner Arnold for thinking about increasing the number of public housing units. She added that it is difficult to live in San Francisco and would like to have additional public housing units for families. Vice President of McCormack Baron Salazar, Yusef Freeman, stated that Alice Griffith is the densest of the reconstruction units in HOPE SF and that when large family units are built, the ability to get denser without placing children in top floors is limited and becomes exponentially costly. Ms. Armstrong asked how the number of affordable housing units was determined. Mr. Freeman responded that that was part of a negotiation to provide a mix and de-concentrate public housing. Ms. Smith asked Mr. Freeman to define affordable. Mr. Freeman responded that affordable is capped at 50% of the area median income. Ms. Smith asked for the number of affordable units. Mr. Freeman responded that there were 248 units throughout all the phases.

5 Commissioner Arnold stated that the 170 affordable units built off-site should be mentioned at the Board of Commissioners' meeting. First: Commissioner Fong motioned to move the Resolution as amended to the Board of Commissioners for action without a recommendation Nays: Item 5. Commissioner Arnold requested not to have blanket approvals on future documents. Finance Items (1) [RESOLUTION APPROVING AND AUTHORIZING THE ACTING EXECUTIVE DIRECTOR TO ENTER INTO A TWO (2) YEAR CONTRACT WITH INTERNATIONAL FIRE, INC. TO PROVIDE FIRE SPRINKLER & STANDPIPE PREVENTIVE MAINTENANCE AT ITS PROPERTIES FOR AN AMOUNT NOT- TO-EXCEED TWO HUNDRED THOUSAND DOLLARS ($200,000), SUBJECT TO THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT'S APPROVAL] Presented by: Simon Chu, Project Manager, Housing Development and Modernization Commissioner Arnold asked why the contract could not be extended. Mr. Chu responded that the contract had expired. Commissioner Arnold asked how the Authority continues to receive the service. Mr. Gebala explained that the service has been extended as needed. First: Commissioner Fong motioned to recommend approval of the item to the Board of Commissioners and that it be placed on the Consent Calendar Nays: (2) [RESOLUTION APPROVING AND AUTHORIZING THE ACTING EXECUTIVE DIRECTOR TO ENTER INTO A TWO (2) YEAR CONTRACT WITH CD & POWER TO PROVIDE STANDBY GENERATOR PREVENTIVE MAINTENANCE AT ITS PROPERTIES FOR AN AMOUNT NOT-TO-EXCEED ONE HUNDRED FORTY THOUSAND DOLLARS ($140,000), SUBJECT TO THE UNITED STATED DEPARTMENT OF HOUSING AND URBAN DEVEOPMENT'S APPROVAL]

6 Presented by: Simon Chu, Project Manager, Housing Development and Modernization Commissioner Arnold asked for the funding source for the contract. Mr. Gebala responded that the source would be Capital Funds. Public Comment (s) Item 6. Standing Items First: Commissioner Fong motioned to recommend approval of the item to the Board of Commissioners and that it be placed on the Consent Calendar Ayes: Commissioner Arnold, Fong and Titus Nays: A. Monthly Update: Software Conversion Commissioner Arnold asked for an update on the priority items. Strategic Planning Analyst; Mercy Sanchez reported that she went through the Sprint Document with each Authority staff that had an outstanding item and stated that the project management software was up to date. She reported that 2015 W-2 information was being uploaded, and Budget Maestro would be implemented by February 1, She stated that her focus was to have more face-to-face time with Authority staff and Emphasys and making sure items are turned around quickly. Commissioner Arnold asked if Emphasys produces 14-day notices. Government Affairs and Policy Director and Supervising Attorney, Linda Martin-Mason, responded that Emphasys had been producing the notices and the notices had been going out for the past two (2) months. Ms. Martin-Mason added that an update would be provided at the next Resident, Services, Operations and Personnel (RSOP) Committee meeting and at the second Board of Commissioners meeting of the month. Commissioner Arnold asked if there were issues with Emphasys creating and sending accurate checks to landlords. Ms. Sanchez responded that the Partner Portal should solve those issues. Acting Executive Director, Barbara Smith, added that there are no authority to access the reserves to be able to advance checks to landlords. Ms. Smith stated that the Authority would try to get HUD to give the Authority access to the reserves to make sure landlords receive checks on time. Commissioner Arnold asked if Emphasys Cloud backup costs $450,000 and Microsoft Cloud backup of Emphasys system costs $50,000. Information Technology (IT) Director; David Rosario responded in the affirmative. B. Monthly Update: Procurement Chief Procurement Officer; Solomon Gebala presented a revised Annual Procurement Contract Plan. Commissioner Fong suggested that the column Expected Procurement be amended to Expected Award. Commissioner Arnold asked if the list presented was a complete list of anticipated procurements. Mr. Gebala responded that there were about items missing. Commissioner Fong asked if the Authority was taking advantage of presort for large mailings. Mr. Gebala responded that all of the Authority s mailings are legal notices by first class and presorts will not deliver first class. He added that if a mailing is not a legal notice, presort is used. Commissioner Arnold suggested

7 adding a column that distinguishes between new and on-going procurements. Mr. Gebala responded that he would add that column. Public Comment PHTA Treasurer, Neola Gans, asked if the funding sources for the procurement items on the Annual Procurement Contract Plan were subsidies or Capital Funds. Mr. Gebala responded that the funding sources are a blend of subsidies and Capital Funds. He added that in some cases, the funding sources are only subsidies or only Capital Funds. Item 7. Adjournment The meeting was adjourned at 10:54am.