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BCC Minutes 07/01/1980 C Haple~, Florida, July 1, 1980 LET IT BE REMEMBERED, that the Board of County Commissioners in and for the County of Collier, and also acting as the Governing Board(s) of such special districts herein, met on this date at 9:20 A.M. in Special Conference Session in Building "F" of the Courthouse Complex with the following members present: VICE-CHAIRMAN: Thomas P. Archer John A. Pistor C. R. "Russ:' Wimer David C. Brown '. ABSENT: Clifford Wenzel'. Chainnan ALSO PRESENT: William J. Reagan, Clerk; Hdruld L. Hdll, Chief Deputy Cle~k/Fiscal Officer; Edna Brenneman. Deputy Clerk; C. William Nonnan, County Manager; Donald A. Pickworth, County Attorney; Terry Virta, Community Development Administrator; Danny Crew, Planning Director; and Sandra Yates, Coordinator - Immokalee Block Grant. AGENDA 1. Discussion with regard to a proposed "Letter of Intent" re the issuance of Mortgage Revenue Bonds. ,....,...."""" ... .,.., BOOK 053 rAGE 741 July 1, I980 DISCUSSION WITH REGARD TO PROPOSED "LETTER OF INTENT" RE ISSUANCE OF MORTGAGE REVENUE BONDS (CONTINUED FROM SPECIAL SESSION 7/1/80) - ACTION TO BE TAKEN DURING REGULAR SESSION 7/8/80 Mr. David J. Fischer, of Fischer, Johnson, Allen & Burke, Incor- por'Ated, of St. Petershurg, Florida opened the discussion with regard to the proposed issuance of Mortgage Revenue Bonds by intrOducing another member of the firm, Glenn T. Allen, Jr., and, also, Mr. Nonnan Pellegrini, of Southeastern Municinal Bonds, Inc. whom he said were present to respond to questions, if any, from the Commissioners. Mr. Fischer advised that there have been four housing issues in the State of Florida and that the finn he represents has been financial consultants on two of those four and said that there are a number of other counties contemplating the subject program. As noted during the Special Session of the Board this date at which time the subject was discussed, Mr. Fischer said that the time frame has been revised so that the counties and/or other governmental entities have until the end of the year in which to take appropriate action with regard to the Program being discllssed. Ik, Fi scher explained briefly the various aspects with regard to the establishment of a Housing Finance Authority and the issuance of Mortgage Revenue Bonds, emphasizing that the Program is self-supporting and that the County does not obligate any of its revenues, wheth~r ad valorem taxes, G~neral Fund monies, or the like. Mr, Allen, having d~stributed Fact Sheets pertaining to the subject Ft'ogram, reviewed various portions of the paper, including such matters as the purpose for the Bond Issue, the security behind the Bonds, the mechanics involved in obtaining reduced rate mortgage money, the commit- ments of the mortgage lenders, the insurance policies required, and other pertinent information. Esspntially, said Mr. Allen, the Program is a Mortgagp. Purchase Program entered into by the Housing Finance Authority, established by the Board, and the Trustees, with lenders within the community and provides an instrument for the obtaining of low-interest bearing mortgages for single-family residences by middle, moderate to lesser income families. ''t " I I I , J, Mr. Allen detailed the official actions which have been taken in Congress to date to permit the issuance of Mortgage Revenue Bonds without restriction throughout the year's end and said that bond counsels throughout the country would now issue fairly "clean" legal opinions on the bond issue and can approach rating agencies and receive AA ratings for marketing the bonds between the present date and the end of the year. Concerning the actions needed, Mr. Allen said that a number of counties have adopted ordinances, without a resolution of need, in order to put the authority on the books naming underwriters, bond counsel and size of the issue, pending development of economic data indicating whether or not there is a substantial need for slJch an issue in the county, following which act'on can be taken to implement the Program. Mr, Allen cited examples of maximum income qualifications and purchase prices for homes in certain Florida counties. He also noted that the subject Program does not go on ad infinitum, such as a h~using agency, hut is a closed program that "does one thing at one time where there is a need". Further, said r'lr. Allen, the Program is self-administering, and that there is no additional build-up of bureauc~acy to manage the Program. The Authority sets the guidelines, he continu~d, with regard to eligibility, based on the particular county's base, and not by a government agency establishing the income level. Mr. Fischer stressed the benefits to be derived by the middle and lower inco~ne fami;y, with earnir ; between $13,000 and $20,000, noting that there dre very few benefits and subsidies available to thi~ group of taxpayers who hear the brunt of inflation. The design of the Housing Issue, said Mr. Fischer, is to issue Tax Exempt Bonds at a tax-exempt level, explaining how a qualified individual could save as much as 3% in mortgaye interest rates. As far as the County is concerned, Mr. Fischer said that a separate County department is not needed since no administration is done by the County itself and ::e stressed the fact that local free enterprises are ;'3t'ticipants and are nut "cut Oll~ by a government program. Mr. Pelligrini emphasized the flexibility which is involved for e5ti1blishi'1~ ['i1ri\meters, '1oti'1~ thilt. t.hp Authority p<;t.!'l111ishes the mi1YimUm income limits and purchase price maximum, and defines what type units are eligible under the Program. In this way, he continued, the Program can be structured and tailored to meet the individual needs of the counties throughout the State. Commissioner Pistut' inquired if the subject loans are only available to families building single-family homes with Mr. Allen stating that allhough they are entitled Singlp F;!mily Mortgage Revenue [lends, quad- rlJplexes Ciln be included as well as units in condominiums but not a condo- minium, with the "key" point being home-ownership. Other points brought out during the discussion covered such matters as a developer not being eligible for finanCing under the Program, although purchasers of units in the development would be, if qualified; controls over the interest rilte to be charg~d by the participants; the fact that the costs for the issuance of the bonds, and like expenses, are paid from the bond issue; the control the Board has over the Authority, including the fact that the Board can pass a rescinding ordinance diSbanding such Authority, if deemed advisable; plus additional matters of general interest. ~1r. Fischer responded in the affirmative to Fiscal Officer Ha1"old Hull's statement that it is his understanding that the issue must be marketed between the present date and the end of the year, with Mr. Allen observing that the Authority has to do certain "things" fairly rapidly in order to qualify under the existing rules or just to meet the time frame in existance; i.e. the Board, sitting as the Authority initially, or the Authority must appoint a bond counsel, select underwriters, and indicate the size of the issue. He said that, pursuant to advice received from competent persons, the Board should issue a Resolution of Intent, citing the Statutes for such governmental type of financing, appoint underwriters and determine the size of the issue, and indicating that an Authority will be appointed. Responding to Conmissioner Pistor, Mr. Allen explained, as contained in the aforementioned Fact Sheet, that if the requested amount of mortgage money is not util ized by the mortgage lenders in a specified amo.;nt of time, the commitment fee will be reta i ned in the Program on a prorated bas is and flows into the Bond Retirement Fund. ~ ... 'J ...) ... J'-'~" Community Development Administrator Virta questioned whether it is realistic to implement the Program between the present date and the end of the year, noting that he has received estimates from per~ons in other counties ranging from 12 months to two years to effect such Program. Mr. Fischer responded by stating that certain legal bridges had to be crossed and tested through the Supreme Court, which has now been done, and estimated a time frame of between four and five months. Mr. Virta inquired if there are any items involved which would call for the encumbrance of County funds with Mr. Allen responding in the negative, noting that the economic study, with the approval of the Authority, is condu~ted by the underwriters and paid by their funds. Other expenses such as legal notices, special ,lIeetings with lendcr~ for the purpose of receiving their input, and the like, are also paid for by the underwriters. He noted that the subject funds come from the bond issue at a later date. Mr. Pelligrini explained, addressing ~'r. Virta's concern, how the integrity of the lending institutions is maintained in the event the HFA mortgages do not become competitive with, for instance, FHA mortga~es. and how the expenses incurred therefore are funded. There were no further questions forthcoming from the Commissioners in atte~dance nor from the staff members present. Following brief discussion, it was t~e consensus of the Board that further consideration of the Program be scheduled on the Board's agenda for the meeting of July 8, 1980 and Vice-Chairman Archer so directed, extending an invitation for the consultants to attend the meeting. The Vice-Chairman also requested that any additional information available be turned over to the County Attorney for his review. The meeting was adjourned by order of the Vice-Chairman at 10:10 A.M.