SHA January 25, 2024 Board of Commissioners Retreat Minutes

MINUTES
REGULAR MEETING OF THE
BOARD OF COMMISSIONERS OF THE
SANFORD HOUSING AUTHORITY
MONDAY, JANUARY 25, 2024, AT 6:00 P.M. 
317 CHATHAM STREET SANFORD, NC 27330

A meeting of the Board of Commissioners for Sanford Housing Authority was held on Thursday, January 25, 2024, at 1:55 p.m. at the Dennis A. Wicker Convention Center, Room #103, 1801 Nash St. Sanford NC 27330. Notice of this meeting was duly posted.

1. Roll Call:

ATTENDANCE:

• Commissioner Hope White, Chairperson (Left at the beginning of the meeting)
• Commissioner William Newby, Vice Chairperson
• Commissioner Karen Wicker
• Commissioner Holly Aeschliman
• Commissioner Erin Britton
• Commissioner Carolyn Gilchrist

ABSENT:

2. APPROVAL OF MINUTES:
Ms. White explained that because some people just got their board packet today, we make a motion to approve the minutes but note that if we have to go back and make changes we would. Ms. White asked someone to make a motion to approve the board minutes from the November 27, 2023, Regular board meeting. Mr. Newby made a motion to approve the board minutes from the November 27, 2023, Regular board meeting. Ms. Britton seconded the motion; all were in favor. The motion passed unanimously. All were in favor; none were opposed.

3. Financial Report

Darrell Rainey from BDO Reported:

Public Housing
Public Housing, which is seen on page two, has a net cash flow YTD of $96,000, which is $76,000 higher than the budgeted YTD. The variance is due to an increase in rental income, operating subsidies, and savings in utilities. The savings in utilities are a timing thing because we have not yet processed the annual garbage invoices, which plays a huge part in the $35,000 variance. However, between the garbage invoices that should be processed soon and the increase in operating revenue, this is how we are at the $76,000 that we are currently over budget. Ms. White asked about the garbage invoices. Darrell explained that the properties no longer pay real estate taxes, but they do have to pay an annual garbage fee through the city. Mr. Goodson said that they do not bill us monthly anymore, but annually, and that we just received the invoices via email. Darrell said that we just received it. Ms. White said that she thought that trash was included with water and sewer. Darrell said that it is not, it is a separate fee, and the invoice. Ms. White asked if we had spoken with Hal about this. Darrell said that this is a separate agreement so that the public housing properties do not pay real estate taxes so it would be different from residential water and sewer.

COCC
As of right now, there is a positive net cash flow of$68,000 which is $130,000 higher than budget. Darrell stated that the increase is due partially to the land sale that took place earlier in the year for $100,000 and savings in the administrative staff positions because of the vacant CFO position. Ms. White asked Darrell if he knew anybody who would come to Sanford for the CFO position, and if he did, to please send the resume to Mr. Goodson.

HCV
Is trending close to budget. Operating revenue is down $15,000 but he thinks it is a timing thing. HCV is running smoothly. He asked if there were any questions; there were no questions.

Balance Sheet
Currently, unrestricted cash is at $211,000. Most of this is in Public Housing. There is a negative cash balance for COCC because Public Housing is covering some expenses for COCC but you also have this $211,000 from the developer fees received the other month. Darrell said that he would advise that we take a good look at our cash because that will determine our ability to pay bills. Mr. Newby asked where the $211,000 came from and Mr. Goodson said on page 1 on the balance sheet. He said that this is cash that you can spend immediately and is unrestricted. Darrell concluded by saying that he thinks that things are flowing in the right direction even though it is early in the year.

Ms. White told the board that she asked Mr. Goodson for an updated list of outstanding balances since we do have some unrestricted cash. Mr. Goodson said that he would have it for the February board meeting.

4. Department Head Reports

Public Housing Report
Sherri reported that Public Housing ended the month of December with an eighty-two percent occupancy rate. However, we are having to do some transfers because there are some units that we have discovered that people should not be living in, so we are going to be transferring them out. We have twelve new move-ins planned for next week and the second week of February. Sherri also stated that we will also be in court with a lot of evictions soon, but Public Housing is doing very well.

Ms. White asked if we are fully staffed in maintenance and Sherri said we have one vacancy. She said that there is an increase in the number of work orders, which is different from when she first started here. There is a lot more done for each property. She started with LUF and 226 Linden; for Utley, we issued twelve but had twenty-six because some rolled over from the last month and now the reports are more accurate than before. Sherri said that she must get staff to work on charging tenants for repairs beyond normal wear and tear and the new software will help better track and bill the tenants.

MGG
There are ten vacancies and Sherri spoke to the Property Manager and the Assistant Property Manager yesterday and she stressed that the units must get leased up. She said that their waitlist is open and has been open, so the manager and assistant manager are working hard to get people in the units. She said that they have run into some problems where tenants do not show up on move-in day. Ms. White said that she has seen drug busts in the paper and asked when there is a drug bust, can we just put tenants out and not have to go to court? Sherri said that we cannot take away their due diligence and they have a right to court; they will be in court on February l51 at 9:00 am. Ms. White asked, though the Property Managers do not live in Sanford if the Property Managers can prevent some of the stuff that is going on in the communities by visiting the properties more often. Sherri said that we are working on getting them out of their chairs and out on the properties. Sherri said that they do have office hours though to work on the vast paperwork that HUD requires them to complete. Sherri said that we account for them having time to do their administrative duties without tenants being able to assess them, but she is finding that our Property Managers are not out in the communities enough and this is an area where she is receiving pushback from them. Ms. Britton asked if the offices were on the property, and Sherri said yes. Sherri said that Property Managers should be in their communities at least 30 minutes daily canvassing their properties. She said that MOO ended the month with a 95% occupancy rate, with ten vacancies in total.

There were twenty work orders issued between the two properties, but tenants were not charged. Ms. Britton asked if we track the tenant's fault versus normal wear and tear and Sherri said no. She said the maintenance staff will determine if it is a tenant charge and it should be noted on the form for discussion with the Property Manager. She also said that the Property Manager should be asking questions once a work order is issued because they are responsible for opening and closing the work orders and ensuring that things are charged properly. Sherri said that the new software will help track the most used items, inventory, etc.

We will have to inventory everything, and we are currently not doing it. She said that she has made a preventative maintenance schedule to determine its condition. The preventative maintenance plan allows us to be in the units to inspect appliances and equipment monthly. She said that Danielle understands that when her units sit vacant, we will never recoup the money, it is gone. Ms. Britton asked how we determine if we charge tenants. Sherry gave some examples of when a tenant is charged and said that normal wear and tear is not charged to the tenant. Ms. Gilchrist asked how we determine when blinds need to be replaced. Sherri said that if the Property Managers are checking on the properties, they should be responsible for ordering new blinds and if they need to be charged, charged.

HCV
Sherri reported that the regular vouchers are the vouchers that Section 8 is responsible for, and we are 71% leased up. She said that our Section 8 department does not have control over V ASH, nor the Harnett Training School and we are not graded on their occupancy rate. We are graded on MGG, which is part of the PBV program, and their vouchers are taken out of her balance. We are at 101% YTD use of the money that HUD allocates to be used for Section 8, but we would rather be over by a little than under. During December, we were at 95% utilization, so if we were to get graded today, we would get all our points which are averaged over 12 months, so HCV is doing good.

Sherri said that we are meeting with and helping the Property Management staff understand the consequences of not receiving collectibles. She said that she ran a Tenants Account Receivables report, and the managers are now responsible for running them each week and she will run once a month. She gave the example: On December 31, 2023, at Linden Heights, we had $9134.00 of uncollected monies from our tenants and as of yesterday, the balance is now $3181.00 so we collected $5053 .00 just from one property. She said that she has told them that this is one of the top three responsibilities of a Property Manager and if they cannot do that, we must make sure that we have the right people in place.

At Utley Plaza, we had $7,780.00 outstanding debt and now we have $6000.00 outstanding; so, we collected $1700.00. Foushee was not as good, we have $7023.00, and we are up to $7283.00. Finally, Harris Court had $2027 outstanding and is now down to $799.00. She said that we cannot look at 0-30 days late because people need time to pay, but any accounts that are 31-plus days are not acceptable. For example, Linden had $5135 .00 which was 90 days plus and as of yesterday, it is down to $75.00. Sheri said that MGG has a court date of February 1, 2024, to evict twenty-nine tenants and LUF has twelve.

Mr. Goodson said that the goal is to get the money, not to evict, but now people know that we are not playing. He said that they now see that there are repercussions for not paying their rent. Sherri said that she tells the Managers to take them to court. When we went to court today, all three people came to court and paid; the judge granted the eviction, pending they did not pay as soon as they walked out of court. Garden-Gilmore had $186,766 due from current tenants and $82,000 was collected in a month. Sherri said that if we do not send our HUD notices on the 6th of the month, the tenants do not think that we are serious. She said that the staff was trained yesterday on the new system to know what tenants owe. Ms. White asked if someone would be there to assist them with the new system and if the training was effective; Sherri said we would not know the effectiveness of the training until we work with the software, but we do have people who can assist staff. MGG still has $100,627owed from people who live there now. Ms. White asked if this was verified that the money owed was accurate; Sherri said yes, she had gone ledger by ledger, case by case to confirm.

Resident Services
Shkera stated that we have a partner who will be offering tax services. She asked if there were any questions. Ms. White asked about upcoming events. Shkera said that there is a tax event coming up next Wednesday, February 1st.

5. New Business

1. Sherri explained that the equipment that is old and needs to be disposed of for each property is listed in the disposition report in the packet. She said that we must dispose of old refrigerators, stoves, furniture, and other items in an organized manner that coincides with HUD's guidelines. Mr. Goodson said that we have cleaned up the maintenance department and we are trying to add some organization because some things got neglected. Sherri said there is a man who wants to get some of this property to scrap for cash, but we cannot do it like that. Mr. Newby asked for someone to make a motion.
   
   Ms. Britton motioned to approve the disposition of equipment. All were in favor; the motion passed unanimously.
   
   
2. Collection Loss Write-Off Report for Public Housing. Sherri explained that this report shows uncollected money from tenants who no longer live in one of our properties. She said that the amount is extremely high, over $76,000, but it is because this report has not been developed in two years to her understanding.
   
   Ms. Britton motioned to approve the write-off of uncollected money for $76,399.52 for the 2022 year through quarter l of 2024. The motion was passed unanimously.
   
   
3. Paid Time Off. Ms. Britton motioned to approve the new PTO policy. All were in favor; the motion passed unanimously.
   
   Mr. Goodson asked the board's permission to speak with Bishop Mellette regarding negotiations for the property on Garden Street that the church would like to purchase to relieve them of the restrictive covenants. Mr. Goodson said that he would report back to the board the negotiated price. Mr. Newby reiterated that Mr. Goodson is seeking permission from the board to speak with Bishop Mellette on the use of the property clause and to bring back a negotiated price for the property in the February board meeting. Mr. Goodson explained that the information for this item is in the first part of the board retreat packet and that we spoke about it earlier during the board retreat; permission was granted to Mr. Goodson.
   
   
4. Mr. Goodson spoke about the next item which was auditor selection. He said that he recommends Barton & Gonzalez because of the price and because they are doing a good job working with us. He said that he would stick with them but after these three years, we should switch because we would have had them for 10 years.

Ms. Britton moved to approve the proposal for auditing services for the years ending 2024, 2025, & 2026. All were in favor; the motion passed unanimously.

Mr. Goodson said that we would bring tenant utilities back up next month with more information about what we are proposing and why; therefore, no action is needed right now. We will have the amount of savings for the agency at February's board meeting.

Mr. Goodson said that he spoke with Jeff Lyons, and they cannot defer the fees because the business model does not allow for that, but he would work with us aggressively to secure pre-development funding so that we can pay for soft costs leading up to the development. Ms. White had to leave and stated that Mr. Newby would take over the meeting. She asked that if the board voted to go with TAG, we put restrictions on billable hours for them because their fee is $250 per hour. She said that having a CFO would help with this, but we do not have one. Mr. Goodson said that his experience with TAG has been that they do bill accordingly. He recommended that we use TAG for the Stewart Manor project and that he knows that there may be some apprehension because of the hourly rate; however, Jeff would work with us to get pre-development fees. He said that their business model is not set up to be flexible with the fees because, if they work on the project for two years but never get to closing, then their company never gets paid; developers get paid a lot of money at closing. Developers will take the risk, but TAG is not set up like that to take that risk. Mr. Goodson said that we can get pre-development funds from the city and county because everyone has a personal stake in the redevelopment of Stewart Manor. He said that if he thought that we should not do this and could not do this, this project would not be an agenda item.

Mr. Newby reminded the board that Ms. White asked that we limit the number of hours that TAG works monthly. Mr. Goodson said that he was fine with this. Mr. Britton said that she does not want things to fall through the cracks because we are limiting them, and she also does not want a principal to work on a project that a research associate could work on to make more money. Mr. Goodson said that this would not happen and that we would be working with Jane Dixon, who is a Senior Associate. If we bring on TAG, we will be bringing on the top financial consultants in this business. He said that he has already told Jeff that we do not have a ton of money and we can suggest in the motion that we cap the number of billable hours to 15 hours per month, and if we get pre-development fees, then adjust the hours. Ms. Aeschliman asked if the 15 hours were arbitrary, and Mr. Goodson said, no, this was the number that the chairperson mentioned and he wants her to be comfortable also if any other board member has any apprehensions, he would like to address those as well.

Mr. Goodson said that we are here to do development. Mr. Newby said that we brought Mr. Goodson here to do deals like this but if the board does not like this idea, we must give him a better idea because we cannot continue to let Stewart Manor sit there. Mr. Newby said, in all fairness, he needs to be able to do what he was brought here to do through development so that we can get more money from these properties. Mr. Newby said that if Mr. Goodson leaves, we would then lose a COO and we already do not have a CFO. Mr. Goodson said that he is not threatening the board to leave but if the board does not want to do the deals, they can get someone else in the position for a whole lot cheaper than him. He said that this is his community, and he wants to do the deals. Ms. Britton said that she does not want to limit them hour-wise. Ms. Aeschliman said that the authority has been done wrong in the past but because of Mr. Goodson's relationship with TAG, she does not see that happening. Mr. Goodson said that he would assure the board that he would monitor the hours himself so that the hours would not get away from us. He said that he thinks that Jeff will help us with 1000 Carthage St as well.

Ms. Gilchrist said that she must take risks in her business, and they must price themselves higher because you cannot start too low. It makes people question your work. Mr. Goodson said that with proper documentation, some of the pre-development income can be used to reimburse the agency. He said that if we do not get predevelopment income, we will get money back at closing. He said that he is sure that he qualifies to get developer fees in North Carolina, so we will not have to use Charlotte because they are expensive. He said that he qualifies to get the fees with Florida's Housing finance agencies because of his experience. Mr. Goodson said that he would rather do the 15 hours versus $2500 cap. Ms. Britton made the motion to utilize TAG & Associates as the financial advisor for the Stewart Manor development project and other projects with a 15- hour-per-month cap and renegotiate if pre-development funds are received. All were in favor; the motion passed unanimously.

6. Commissioners' Comments
No additional comments

7. Public Comments
There were no public comments.

8. Closed Session
No Closed Session

9. Adjournment
Ms. Aeschliman moved to adjourn the regular board meeting for January 25, 2024. Ms. Gilchrist seconded the motion. All were in favor; the motion to adjourn the meeting was unanimous.

The board meeting adjourned at 4: 15 pm.

Marcus D. Goodson, Secretary