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2000.05.22 MAHTF MinutesAFFORDABLE HOUSING TRUST Minutes May 22, 2000 Members Present: Peg Murray, Don Bianchi, Matt Pitoniak, Netti Andersen, Mayor Higgins. Also present, Helen Marusek, Treasurer and Peg Keller, staff. Call to Order/ Chair Murray called the meeting to order at 5:35 p.m. Mr. Bianchi made a motion to accept the minutes of the last meeting, seconded by Mayor Higgins, vote unanimous. Treasurer’s Report / Ms. Marusek distributed a handout depicting the total deposits. $34,441.41 is still in the MMDT account and the Paine Webber CD is due June 15th. She said that Florence Savings Bank has the best rate but she is not sure what else is out there or what other monies may be coming in. Chair Murray noted that the Trustees are limited to placing funds in CD’s now without further investigation. The MMDT rate is 5.7%. Because the Trust probably will not meet prior to the June 15th date, she suggested that Ms. Marusek combine the $34,441 with the Paine Webber account and survey those financial institutions that contributed to the Fund to see where the best rate is, for future placement. The Treasurer will call around to get rates for 6, 9 and 12 months, then confirm with Ms. Murray. It can then all be consolidated in October. Members discussed the need to have information about when the remainder of the money from Spear Management can be expected and the schedule for rehab. Peg Keller will follow up. Mr. Bianchi asked about risk involved in placing all our funds in one location with FDIC coverage of only $100,000. Chair Murray responded by saying the risk is low, unless the bank itself is at risk. It was noted that now that there is more money, it should garner more bargaining power. Maturity rates can be staggered and members felt it would be safe to lock in for 12 months, although the time period predicted for accessing the funds is earlier than first planned. Mr. Bianchi made a motion to have the Treasurer check all banks listed as contributors for 6, 9 and 12 month rates, locate the best rate and combine the MMDT and the Paine Webber accounts. The motion was seconded by Ms. Andersen, vote was unanimous in favor. 2 Mr. Pitoniak stated that we could be doubling the interest rate with equities, and thereby double the income. With GNMAE, FNMAE treasuries, we could get 7.5% interest tomorrow. Discussion followed and a sub-committee was created to review the Hampton Gardens Agreement with Spear Management to identify areas that should be revisited, such as where the City can invest the funds. Mayor Higgins asked for a summary sheet describing the funding components and the requirements of each/ the MHFA loan and the Housing Stabilization Fund award from DHCD. The sub-committee will consist of Mayor Higgins, Chair Murray and Peg Keller. Chair Murray brought forward a request that had been made to her by the YWCA for roughly $5,000 to enhance rental assistance for an existing program for transitional housing for young mothers. She said she did not think we should entertain outside requests until we were certain we could fulfill our obligations to Hampton Gardens. Members then reviewed the spreadsheet supplied by Gerry Joseph of Community Builders. It was noted that the entire arrangement was not designed to address households with very low incomes. It was hoped that those families would be assisted by government subsidies. The fund will only address the moderate-income level. Too much subsidy would be required to address the lower range. The analysis based on people paying 35% of their incomes rather than 30% was discussed. The agreement would need to be changed if the percentage were to be changed. Members felt that as it stands now (based on the time delay in the receipt of funds from Spear Management and the 30% turnover rate the first year) we are short on the Hampton Gardens obligation and a decision on how to use the money not allocated to the complex needs to be made. Other members agreed to review the existing agreement and get comments to the sub-committee. Discussion of Charge/ Chair Murray circulated a chart she created that focused on the role of the Trustees and the purpose of the fund. Mr. Pitoniak expressed his understanding that the Trustees had been appointed to manage the fund and that other housing groups would do advocacy work and fundraising. The purpose of the Trust in his view is to manage the funds per the Hampton Gardens Agreement and any other funds that come in. Ms. Andersen said she had the same impression initially, although she does not necessarily agree with a pure fiscal purpose. She said all would function better if the Trust was closely aligned with other advocate groups and the Trust combined the fiscal management role with some advocacy. 3 Mr. Bianchi read the powers and duties from the Ordinance. He said cooperation with existing agencies is necessary but not duplication. He noted that the Housing Partnership has not been aggressive in securing additional funding for the Trust. He said that other funds across the country have succeeded in getting other funds. The Housing Partnership bemoans the lack of resources and the need to have sources other than CDBG. He stated that although he respects the thrust of Mayor Ford’s original invitation for Trust membership, it is his desire to interpret the charge more broadly. Chair Murray said she agreed with all the points raised and is less willing to be passive. She said that although Mayor Ford did talk about fiduciary responsibility, the fund was developed more broadly, to address more than Hampton Gardens, ultimately. She said that she does not see the job including a capital campaign or bake sales, but the fund does need to be capitalized. She said the City should be able to find a way to do that, as opposed to Trust members walking the streets. She said the Trustees should find a way if the City cannot or will not. She said the Housing Partnership presentation to the City Council is a good effort to get the word out. Mr. Bianchi mentioned the effort to create a Housing Trust Fund at the State level. He said now is the time to follow-up on raising community money, taking advantage of the current publicity. Mayor Higgins responded that the charge of the Trust is not a simple answer. She said the Trust should increase the fund, but she is not sure that the City as a funder of the Trust is possible. She supports looking for other funding streams. Unlikely sources are bond issues or taxes. More likely sources are Payment in Lieu of Taxes contributions and fees and fines. Mr. Pitoniak added that most local businesses are small and get on the average 15 requests a week for money and/or goods. This issue is not really on their radar screen. Mayor Higgins said this emphasizes the continuing need for the education piece. She noted that all the new growth at Smith College does not contribute to City coffers at all. In conclusion, members agreed to investigate loosening the investment restrictions, identifying the distinctions between our own money and the Hampton Garden money after the initial $100,000 local contribution and to look at possibilities within the framework of Massachusetts models for increasing the fund. Adjourn/ The meeting concluded at 7:00 p.m. Respectfully submitted, Peg Keller