MIDDLE INCOME HOUSING AUTHORITY
MEETING MINUTES
October 4, 2023
10:45 a.m. – 3:15 p.m.
MEETING DATE
October 4, 2023
Zoom
MEETING PARTICIPANTS
A. Board Members
Mike Johnson, Thomas Bryan, Carl Koelbel.
B. Guests
Hilltop Securities: Mattie Prodanovic, Jason Simmons, John Pellicci, Yaffa Rattner, Claire Merritt, Tim Nelson; Sierra Management: John Stoecker, Ben Barker; CSG Advisors: Gene Slater, Adam Cray.
C. Staff
Hilary Cooper, Matt Gorenc, Cory Kalanick.
A. Meeting Called to Order
Johnson called the meeting to order. Quorum was confirmed.
C. Board Business
Financial Advisor Interviews
Gorenc explained to the board that he would be asking each firm the questions. Each firm was asked the same below questions:
- Please describe your experience providing financial advisory services for successful bond financings structured as middle income deals. A-E are examples, but please provide us with your experience in middle-income deals.
- tax-exempt bonds,
- payable from rents and other revenues from an income-restricted middle-income multifamily housing project,
- do not include a substantial direct governmental monetary subsidy from the state, a local government or a foundation or private party,
- are privately placed with high yield investors and,
- include a redemption provision pursuant to which excess revenue is used to redeem bonds early (subject to conditions in the bond documents).
- Please give us your analysis of the current bond market and the likelihood of successful underwriting for MIHA projects including:
- Short term and long term prospects?
- What types of financial structure will be most marketable?
- Terms to close and acceptable risk for MIHA?
- Please provide more detail on your compensation structure and if you are willing to waive or defer payment of all or any portion of your fees until MIHA secures sources of revenue from projects? If we opt to use a fee structure based on a percentage of fees, what level of fees would be reasonable to retain affordability, attract developers to use MIHA bonds and ensure adequate compensation?
- MIHA will partner with developers to take the tax-free bond to market and will become the owner of the project eventually so we have a short term and long term investment in the success of the selected projects. How would you manage the relationship/advisory roles for MIHA vs the project development team? Define the scope of services you are able to offer to MIHA on the project selection phase through the underwriting process.
- Do you recommend that MIHA adopt strict financial standards for evaluating proposals (minimum debt service coverage, minimum reserves, etc.) or would staying flexible and offering innovative debt repayment options attract projects that still have long term financial feasibility?
- Please discuss how you propose to offer your advisory services to MIHA staff and the MIHA board, based on their respective roles.
The board interviewed Hilltop Securities, Sierra Management, and CSG Advisors.
Discussion and Selection
Koelbel and Johnson both mentioned that Sierra Management could offer a full service experience, which could be useful but it would also be important to ensure they are considering board needs.
Bryan mentioned the importance of verifying fees, contract structure, and other logistics.
The board agreed to extend an offer to Sierra Management, and Cooper proposed that she and Kalanick enter into negotiations with the firm. The board agreed and authorized Cooper and Kalanick to do so.
With all items discussed, the meeting was adjourned.