1999.10.16 MAHTF MinutesAFFORDABLE HOUSING TRUST
Minutes
November 16, 1999
Members Present: Peg Murray, Matt Pitoniak, Don Bianchi, Netti Andersen, Mayor Ford. Also present, Helen Marusek, Treasurer, Peg Keller, OPD.
CALL TO ORDER
Chair Peg Murray called the meeting to order at 5:10 p.m. She reported that the Mayor has spoken to representatives of Spear Management who say that we should have the first disbursement
of $120,000 by the end of November, with the rest of the funds by the end of the year. Discussion followed about when the agreement actually gets (got) activated and what the ramifications
of the delay may be for the fund duration. The suggestion was made to ask Spear for the money we have lost in interest, i.e. $513,000 ( not $500,000) rather than ask to lengthen the
time period of the agreement or for permission to invest in higher earning investment vehicles.
Members reviewed the wording the paragraph of the agreement that speaks to when Mr. Spear is obligated to make his contribution to the fund. The paragraph states that if the Housing
Stabilization Fund loan was not closed by 9/4/99, the entire agreement is voided. Peg K. will check on that date.
Ms. Marusek distributed a report on the MMDT fund which averages 5% interest and a report on the funds that have been received from the Mayors Office. They are currently in two accounts
based on whether the donor stipulated Hampton Gardens or just affordable housing. Members clarified that all funds solicited to date were for Hampton Gardens and can be combined into
one account. She agreed to call around to find a money market with a higher interest rate and investigate Certificates of Deposit rates for different time periods. Members did not feel
it made sense to look into treasury bills until we have more money.
Ms. Marusek said that when we have a substantial amount, investment firms would do the planning for us. The Mayor then explained how the State is regulated with regard to trust funds.
Ms. Marusek also handed out a packet from Paine Webber that included a sheet on investment mechanisms available to government entities (without interest rates).
Members then directed Ms. Marusek to combine the two accounts into one, with the entire $97,000 and gather additional information on interest rates. Members agreed that the fund should
not be moved from the MMDT account unless a vehicle with at least ½ % interest rate more can be found. It was agreed that liquidity is not important for the next few years.
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The Mayor noted that a regular reporting mechanism is needed from the Treasurer’s Office to the Trust members. Ms. Marusek said that once an investment is made, the fund would get monthly
reports. Mr. Bianchi said it is also important to track tenant movement. The Mayor said that Spear is obligated to provide information on that in the form of annual reports.
Mr. Bianchi made a motion to (combine the two amounts and) move the money currently raised into a segregated account at the most favorable rate with a maximum term of 12 months. The
Mayor seconded the motion and with no further discussion, the vote was unanimous.
At this point, members revisited the issue raised at the beginning of the meeting, which involved the loss of interest earned. The Mayor felt it was not necessary to renegotiate the
agreement now, but rather at the end of the 15 years. She did agree that it might be prudent, after Spear’s funds are received, to send a letter documenting our awareness of the lost
income. It was determined that the projections as to how the fund would get drawn down should have been made part of the agreement.
Peg K. reported that according to Gerry Joseph of the Community Builders,
the loss of $13,000 (so far) in interest calculates to 7 units that we will not be able to subsidize at the end of 15 years.
Further discussion was held about sending an informal note to Spear informing them of our need for their funds and that we believe that the State rehab funds can be applied earlier in
the process, even though the actual rehab is going slower than anticipated.
Peg K. agreed to check on the status of the State action on the Rent Control bill.
Members then discussed the fact that City staff can write grant applications but cannot actually solicit funds from private citizens for political campaigns or overrides.
The memo from John Musante was reviewed. He stated how funding earned from City property dispositions get earmarked and within what fiscal year. The use of such funds can only be for
purposes or projects that will incur debt for five years or more. He said that the requests for funds from the General Fund for affordable housing purposes would have to be initiated
by the Mayor and approved by Council. Ms. Murray said that the most likely sources for growing the fund seem to be grants and fundraising although it can come out of the City budget
if everyone were to agree. Peg K. agreed to research how the City of Cambridge operates their affordable housing fund.
ADJOURN
There being no further business to discuss, the meeting was adjourned at 6:30 p.m. The date of 12/13 at 5:00 p.m. was set for the next meeting, if Spear’s funds are received.
Respectfully submitted, Peg Keller