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Home My WebLink About2022-06-07-CPC-min 1 MINUTES OF THE COMMUNITY PRESERVATION COMMITTEE June 7, 2022 REMOTE ZOOM MEETING MEETING ID: 456 375 8551 JOINT MEETING WITH CAPITAL EXPENDITURES COMMITTEE AND A FFORDABLE HOUSING TRUST STUDY COMMITTEE Committee Members Present by Roll Call: Marilyn Fenollosa (Chair), Kevin Beuttell (arrived 8:30), Bob Creech, David Horton (arrived 8:35), Jeanne Krieger, Joe Pato, Robert Pressman, Lisah Rhodes, Melinda Walker and David Kanter (Nonmember liaison to the CPC from the Capital Expenditures Committee) Committee Member(s) absent: None Capital Expenditures Committee (CEC) Members Present: Charles Lamb (Chair), David Kanter (Vice Chair), Sandhya Beebee, Michael Boudett, Rodney Cole, Frank Smith, Sara Arnold (Nonmember recording secretary to CEC) Affordable Housing Trust Study Committee (AHTSC) Members Present: Kathryn Roy (Chair), Gretchen Reisig (Vice Chair), Jeri Foutter, Carol Marine, Tara Mizhari, Linda Prosnitz, Betsey Weiss. Other Attendees: Carolyn Kosnoff (Assistant Town Manager for Finance), Carol Kowalski (Assistant Town Manager for Land Use and Community Development), Glenn Parker (Appropriation Committee Chair), Bob Burbidge (LexHAB Chair), Sarah Morrison (LexHAB Executive Director), Liz Rust (Regional Housing Services Office) 1. Call to order: Ms. Fenollosa called the CPC meeting to order at 8:04 AM. 2. Consideration of issues and financing associated with the creation of an Affordable Housing Trust (AHT) in Lexington: Ms. Roy gave a PowerPoint presentation concerning AHTs (see attached slides). Issues discussed: • Why does Lexington need an AHT • What other Massachusetts communities have AHTs • What an AHT can do: create affordable housing opportunities, preserve affordable housing, other miscellaneous powers) • Powers of AHTs under state enabling legislation, MGL Ch. 44, § 55C • Potential AHT funding sources and funds flow • Role of Lexington Housing Assistance Board (LexHAB) 2 • Checks and balances on AHT activities • Proposed qualifications of AHT trustees • Process to set up an AHT • Next steps Following the presentation, Mr. Lamb polled the CEC for their questions and comments. Issues raised: - How could the AHT be dynamic in responding to proposals if CPC requires a Town Meeting vote (Ms. Beebee) (answer: issue short term debt; draw on AHT trust funds) - Why are there no committees (CEC, AC, CPC) to be represented on the AHT Board of Trustees (Ms. Beebee) (answer: the AHTSC is recommending that members be chosen for their expertise, not their committee membership) - How much money would initially be needed (Mr. Cole) (answer: $1,500,000 for acquisitions with extra funding for developing housing plans and other miscellaneous expenses) - How can the AHT borrow and not require a 2/3 vote of Town Meeting (Mr. Boudett, Mr. Lamb) (answer: because the debt would most likely be collateralized, it wouldn’t count against the Town’s borrowing limit, but this needs confirmation) - Why haven’t we used this mechanism in the past (Mr. Boudett) (answer: because although LexHAB was effective in developing housing, it was determined that as a quasi-town entity it would be subject to public bidding laws, thus making it impossible to compete with private developers) - Would the AHT, also a quasi-town entity, be subject to public bidding laws? (Mr. Boudett) (answer: yes, which is why it would only act as a financing agent, passing on the funds to developers and development corporations) - Why wasn’t an Affordable Housing Development Corporation – the second half of the Select Board’s charge to the AHTSC – discussed? (Mr. Kanter) (answer: although the Study Committee is working on it, it was deemed too much for today’s discussion) Mr. Lamb then asked Mr. Parker for any questions or comments; Mr. Parker was primarily interested in getting more details about the issuance of debt by the AHT. Mr. Lamb next asked the CPC for comments and questions. - Ms. Fenollosa asked if refunding any debt with CPA funds would be allowed, because of the CPA statute’s prohibition on refunding prior expenditures. She also noted that the use of CPA funds for affordable housing has primarily been project- specific, with the exception of a brief experiment to provide an acquisition fund for LexHAB in prior years (after three years, funding was no longer approved), and noted that Town Meeting in the past has wanted to know what, and where, any new housing would be built before they approved the CPA funding request. 3 - Ms. Walker reemphasized that the AHT would be a strictly financing organization, not a builder, so public bidding laws would not be applicable (although she noted that other towns do have development powers in their AHT bylaws). She then stated that an affordable housing development corporation (AHDC) model need not be limited to single family homes- that an AHDC can build multi-family housing, acquiring land, building homes and seeking financing from sources other than the related AHT. - Mr. Pressman asked if the AHTSC was setting aside plans for establishment of an HDC, and was assured that it was not. He also noted that in towns where the AHT has development powers, the AHT is subject to public bidding laws. He suggested that in comparing any proposed AHT for Lexington with those in other towns, the AHTSC should recognize that very little developable land exists in Lexington; that developers are willing to pay very high prices when properties come on the market because of the expected earnings from the sale of new housing developed on the site; and that many town bylaws have exempted funding requests from Select Board review if below a certain threshold. Finally, he stated that if the town chooses to impose a project - oriented approach, it will lose out to developers. - Mr. Horton requested that examples be given of how the AHTs have been successful in other towns, as well as examples of what problems have arisen. He expressed some confusion about the application of prevailing wage laws, which was later clarified by Ms. Walker, and finally, thanked the AHTSC for their hard work. - Mr. Creech commented that Slide 3 would be more effective if additional details could be provided about the advantages of an AHT over the existing framework with LexHAB and CPA funding. The current Town Meeting process is not a competitive process. It would be more effective to add a slide after Slide 3 in order to visually contrast the processes of those competing for properties. He suggested using process flowcharts. The process charts should show roughly the number of steps in each competing process and the elapsed time associated with each process. Competing Processes: • the Builder/Investor/Venture Capital Process, • the Affordable Housing Trust Process, • the Town Meeting Process Ms. Roy then asked for a straw poll of the CEC and CPC as to their support of the concept. The CEC was unanimously in favor, but still had questions about integration with any AHDC, issues regarding debt financing, the use of mitigation funds from developers for financing projects, and the exclusion of projects from Town Meeting review. The CPC was then polled, as follows: 4 Mr. Beuttell – in favor of the proposal Mr. Creech – in favor, because it would make the Town competitive with builders Mr. Horton – generally in favor, although he wants more information about how the CPC relates to the whole process Ms. Krieger—generally in favor, although she still has questions about how CPC cash flows would work, especially in relation to Town Meeting Mr. Pato – generally in favor, preferring pre-funding rather than project-specific financing Mr. Pressman – fully in support of the proposal, stating that the AHT should have maximum authority to operate without oversight when it has funds available Ms. Rhodes – generally in favor, but would want additional details Ms. Walker – Definitely in favor, noting that the Belmont AHT was able to contract with a non-profit agency to administer a rental assistance program for tenants because of the detrimental effects of the pandemic. Ms. Fenollosa – generally in favor, but still concerned that activities of the final receivers of the funds might not be authorized by the CPA statute and stating that iron -clad agreements between the Town, the AHT and the ultimate developer would need to be in place to ensure compliance with the law. 3. Motion: To Approve Minutes from April 11, 2022 and April 13, 2022 (moved and seconded by Mr. Horton and Mr. Pato, respectively) Approved unanimously by roll call vote: 9-0 4. Committee Business: a. Meeting Schedule: Ms. Fenollosa advised that the CPC would not need to meet again over the summer unless something special came up, and that if the CPC did meet after July 15, it would most likely be in person rather than by Zoom per the expiration of the Governor’s directive. b. Member Concerns: None 5. Motion: To adjourn (moved and seconded by Ms. Walker and Ms. Rhodes, respectively) Approved unanimously by roll call vote at 9:20 am: 9-0 Meeting materials: - Affordable Housing Trust Study Committee Presentation to the CEC, CPC and Select Board - Meeting minutes dated April 11, 2022 and April 13, 2022 M. Fenollosa, recorder Approved 9/15/22