* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [1. CALL TO ORDER – 5:30 PM] [00:00:05] EVERYONE TO THE, THE BOARD OF DIRECTORS PUBLIC FACILITY, BERNIE PUBLIC FACILITY CORPORATION'S ANNUAL MEETING, UH, IS OFFICIALLY 6:00 PM APRIL 8TH, 2025. OR I'M SORRY, IT'S 5:30 PM SORRY, 5:30 PM APRIL 8TH, 2025. UH, AGENDA ITEM [2. CONFLICTS OF INTEREST] NUMBER TWO, UH, COUNCIL MEMBERS IS ANY CONFLICTS OF INTEREST THIS EVENING? NO CONFLICTS OF INTEREST FROM ANYONE. ALL RIGHT, WE'RE GONNA MOVE ON TO AGENDA ITEM NUMBER THREE, PUBLIC COMMENTS. UM, I HAVE A PAPERWORK THAT SAYS NOBODY HAS SIGNED UP TO SPEAK. IF SOMEBODY HAS COME IN LATE AND WOULD LIKE TO COME FORWARD AND SPEAK, YOU CAN GIVE YOUR NAME, ADDRESS, AND YOU HAVE THREE MINUTES TO VOICE YOUR THOUGHTS. OKAY? NO TAKERS. WE'RE GOING TO CLOSE PUBLIC COMMENTS AND MOVE INTO AGENDA. ITEM [4. CONSIDER THE MINUTES OF THE NOVEMBER 12, 2024 PUBLIC FACILITY CORPORATION BOARD MEETING.] NUMBER 4 20 25 DASH 1 71. CONSIDER THE MINUTES OF NOVEMBER 12TH, 2024 PUBLIC FACILITY CORPORATION BOARD MEETING. LORI, MAY I MAKE A MOTION THAT WE APPROVE THE MINUTES FROM THE LAST BOARD MEETING? SECOND. I DON'T, THERE'S NOTHING WRONG HERE. THAT'S, SHE'S, WE DON'T HAVE ANYTHING ON NOW. OKAY. IT'S ON NOW. TY MINE. THERE IT IS. OKAY, WE GOT IT. GOT IT. YOU GOT A MOTION? NOPE, WE GOT A MOTION. SECOND. WE'RE NOT GONNA, OKAY. SECOND ONE FROM COUNCIL MACALUSO VOTE. UM, IT'S GONE AGAIN. OH, NO. TRY IT AGAIN. THERE IT IS. THERE IT IS. IT'S ON THERE. PLEASE VOTE. THERE IT IS. IT WAS SLEEPY TO VOTE. I ACTUALLY VOTED YES. WOW. PASSES SIX. OH, THANK YOU EVERYONE. MOVING [5. CONSIDER RESOLUTION NO. 2025-R01; A RESOLUTION AUTHORIZING THE TRANSFER OF THE PARTNERSHIP INTERESTS OF 3 SHOOTING CLUB SLP, LLC, IN LIV BOERNE HILLS, LP, TO AHP HOUSING FUND 205, LLC OR AN AFFILIATE THEREOF; AND AUTHORIZING THE EXECUTION OF AN AMENDMENT TO THE DEVELOPMENT SUB-AGREEMENT AND ANY OTHER DOCUMENTS IN CONNECTION THEREWITH; AND OTHER MATTERS IN CONNECTION THEREWITH.] ON TO AGENDA ITEM NUMBER 5 20 25 DASH 1 62. CONSIDER RESOLUTION NUMBER 2025 DASH R ZERO ONE A RESOLUTION AUTHORIZING THE TRANSFER OF THE PARTNERSHIP INTEREST OF THREE SHOOTING CLUB S-L-P-L-L-C IN LIVE BERNIE HILLS LP TO A HP HOUSING FUND, 2 0 5 LLC OR AN AFFILIATE THEREOF AND AUTHORIZING THE EXECUTION OF AN AMENDMENT TO THE DEVELOPMENT SUB AGREEMENT AND IN THEIR DOCUMENTS IN CONNECTION THERE WITHIN AND, AND THEIR MATTERS IN CONNECTION. THEREWITH, UH, PRESENTING NICK. NICK. GOOD EVENING BOARD, AS THE MAYOR JUST DESCRIBED IN THAT LONG RESOLUTION NUMBER TONIGHT, WE'RE HERE TO DISCUSS A SALE BETWEEN TWO PARTNERS WHO ARE PARTNERS TO BPFC, UM, AND LET'S TALK ABOUT THAT TRANSACTION. AS ALWAYS, WE'LL TALK ABOUT LIVE BERNIE FIRST, RIGHT? IT'S 162 UNIT 55 PLUS AGE RESTRICTED APARTMENT COMPLEX. THIS WAS THE FIRST PROJECT THAT BERNIE PFC, UM, PARTNERED WITH. A CERTIFICATE OF OCCUPANCY WAS ISSUED FOR THAT PROJECT IN 2021. IT'S SINCE BEEN, UM, UP LEASED AND IT'S MAINTAINING ABOUT 85 TO 90% OCCUPANCY AS WE'VE GONE THROUGH THIS THIS LAST YEAR. UM, TONIGHT WE'RE TALKING ABOUT THE TRANSFER OF MISSION DGS INTEREST, INCLUDING ITS OWNERSHIP OF THE SPECIAL LIMITED PARTNER AND ITS RIGHTS TO ANOTHER PARTNER WITHIN THIS A HP HOUSING FUND, 2 0 5 LLC. AS PART OF THIS DEAL, THE PFC WILL RECEIVE 400,000 OF THE OWED DEVELOPER FEE. IF YOU RECALL, AND WE'VE TALKED ABOUT THIS AT THE LAST COUPLE PFC MEETINGS, THAT DEVELOPER FEE WE HAD NOT GOTTEN UP TO THIS POINT. THIS WILL GET US BACK TO THAT 60 40 SPLIT THAT WAS ORIGINALLY CONTEMPLATED IN THE, UH, AGREEMENT WHEN WE FIRST SIGNED IT. THE PFCS CONSENT IS REQUIRED TO MOVE FORWARD WITH THIS PROJECT. I DID ALSO WANT TO NOTE, UNLIKE THE WAYPOINT PROJECT, WE DO NOT HAVE AN OUT THE SAME WAY WE DID. SO THE SALE OF THIS, WE HAVE TO CONSENT. WE DON'T HAVE TO, WE CAN CHOOSE TO CONSENT TO IT, BUT IT DOES NOT CHANGE OUR PARTNERSHIP STATUS WITHIN THE DEAL. I HAVE BOTH SUMMER GREATHOUSE, OUR PFC ATTORNEY, AS WELL AS VICTOR MI REPRESENTING MISSION DEVELOPMENT GROUP HERE. IF THERE'S ANY QUESTIONS WITH THAT, I'LL LEAVE IT OPEN TO QUESTIONS. DOES THAT 400,000 BRING US CURRENT OF THAT DEVELOPER FEE? CORRECT. IT GETS US TO THAT 60 40 SPLIT THAT IS CONTEMPLATED. SO FROM HERE ON OUT, IT'S THE SHARED REVENUE THAT WE GET ANNUALLY BASED ON, UM, WHAT THEY BRING IN ESSENTIALLY. SO THAT SHARED REVENUE WILL COME IN EVERY YEAR. THEN FROM THIS POINT ON, IT SHOULD. THERE IS ALSO THE, UM, SUMMER, WHAT WAS THE, THE CONTINGENCY THAT WAS USED TO GET THE PROJECT OVER THE FINISH LINE. THEY HAD TO DIP INTO THAT. AS PART OF THAT, THERE'LL ALSO BE FUNDS PUT BACK INTO THAT CONTINGENCY, AND THAT HAS TO ESSENTIALLY BE WHOLE BEFORE WE START SEEING WEAVING BERNIE POC START SEEING MONIES FROM THAT AS WELL. SO THERE'S NO WAY TO HOLD THEM TO THAT AGREEMENT AS FAR, WHICH PART, AS FAR AS GETTING THAT CORRECT MONEY, THE PROJECT HAS TO BE ESSENTIALLY OPERATING. ALL THE REST OF IT HAS TO BE OPERATING CORRECTLY. IE THE FUNDS HAVE TO BE PAID, THE DEBTS HAVE TO PAY, BE PAID. ALL OF THAT [00:05:01] HAS TO BE CURRENT FOR US TO GET THOSE FUNDS. SO I CAN'T ANSWER THAT 100% AS YES AS WELL. WELL, I'M JUST WONDERING IF THERE'S ANY LEGAL ACTION WE HAVE TO GO AGAINST IT IF THEY'RE NOT, IF WE DON'T GET OUR FAIR SHARE DIFFERENT, IT'S NOT OUR FAULT THAT THEY CAN'T RUN A RUN A COMPLEX GOOD AFTERNOON. UM, SO THE WAY THAT THE DOCUMENTS ARE DRAFTED IS THAT YOU'RE GETTING 40% OF THE DEVELOPER FEE. THE DEVELOPER FEE IS PAID THE DEFERRED DEVELOPER FEE, WHICH IS WHAT'S REMAINING, IT'S ABOUT $1.03 MILLION. IT'S REMAINING THAT IS PAID AFTER DEBT IS PAID. UM, AND THEN ALL OF THE OPERATING EXPENSES. SO THE, TO THE EXTENT THAT THE PROJECT IS CASH FLOWING, YOU WILL RECEIVE 40% OF THE CASH FLOW EACH YEAR. AND THAT IS, I WOULD HAVE TO DEFER TO THE DEVELOPER IN TERMS OF WHERE THE FINANCES ARE ON THE DEAL, BUT THAT, THAT MONEY IS EXPECTED TO BE PAID OUT OVER THE 15 YEAR COMPLIANCE PERIOD. THAT'S SOMETHING THAT IT HAS TO BE PAID OUT OR ELSE THE PROJECT, UM, DOESN'T RECEIVE ALL OF THE TAX CREDITS. SO THAT IS SOMETHING THAT IS EXPECTED TO BE PAID. SO BY, BY 15 YEARS. CORRECT. A COUPLE OF QUESTIONS, UM, TO THE, TO THE POINT, THE 1.5 MILLION, UH, 1.05 MILLION, AM I SAYING THAT RIGHT? 1.03? YES. OH, 3 MILLION. THAT'S THE DEVELOPMENT FEE PAID OUT OVER TIME. BUT THAT'S NOT THE, THAT'S NOT THE REVENUE SHARING ON THE CASH FLOW IS IT? SO DEFERRED DEVELOPER FEE ON TAX CREDIT PROJECTS IS PAID THROUGH CASH FLOW. ONCE THAT IS PAID OFF, THEN YOU WOULD GO TO YOUR REVENUE SHARING ON THE CASH FLOW SPLIT, WHICH I BELIEVE FOR THIS PROJECT WAS 50 50. I CAN'T, I I WOULD HAVE TO LOOK AT THE AGREEMENT AGAIN, BUT I BELIEVE IT'S 50 50. SO I'M JUST TRYING TO UNDERSTAND THIS. SO IT'S 50 50 ON THE CASH FLOW, BUT THE CASH FLOW IS GOING TO PAY OFF THE DEVELOPER FEE, SO THERE'S NO 50 50 ON THE FRONT END, CORRECT? CORRECT. IT'S ON THE BACK END UNTIL THE DEVELOPER FEE IS PAID OFF. RIGHT. SO CAP, SO ON TAX CREDIT PROJECTS, YOU HAVE A LARGE DEVELOPER FEE, WHICH WHICH IS PAID TO THE EXTENT THAT IT CAN BE PAID. IT CAN ALL BE PAID AT CLOSING DEPENDING ON THE FINANCING AND HOW THE, THE MARKET IS AT THAT POINT IN TIME, WHEN THIS DEAL CLOSED, THERE WAS NOT SUFFICIENT FUNDS. THE INTEREST RATES WEREN'T TO A POINT WHERE WE COULD PAY THE ENTIRE THING UPFRONT. SO, SO THE REMAINDER IS PAID THROUGH CASH FLOW UNTIL IT'S PAID OFF. AND THEN ONCE THAT, SO THAT'S YOUR 60 40 SPLIT. ONCE THAT'S PAID OFF, THEN WE WOULD GO OVER TO THE 50 50 SPLIT. SO THIS STARTED IN 2021, CORRECT. IS THAT OCCUPANCY, YOU SAID? SO 15 YEARS WOULD BE WHAT? 2036? 36. AM I SAYING THAT RIGHT? AM I, I'M GUESSING THAT THAT'S THE TIMELINE WE'RE LOOKING AT. SO IF I REMEMBER CORRECTLY, THERE'S THE POINT OF CERTIFICATE OF OCCUPANCY BEING ISSUED, BUT THERE'S ALSO THE POINT WHERE THEY HIT STABILIZATION. UM, , MY QUESTION IS, WHEN IS THE 15 YEAR CLOCK RUN ON THE PROJECT FOR THE BOND? DO YOU KNOW WHEN YOU GUYS GOT PLACED IN SERVICE? I DON'T KNOW THE EXACT DATE IT WAS. IT WAS PROBABLY IN 21 OR 22. SO MY NEXT QUESTION IS, IF BY 20 36, 35, 36, WHATEVER, IF THE 1.03 MILLION HASN'T BEEN PAID AND THERE'S BEEN NO CAUTION, WHAT IS THE CITY'S POSITION AT THAT TIME WHEN THE TOP CLOCK RUNS OUT ON THE BONDS THAT WE USE TO, TO BUILD A PROJECT? WELL, SO THE, THE DEVELOPER FEE IS, IS SEPARATE FROM THE BONDS. OKAY. THAT'S, SO THAT'S ON THE, THE EQUITY SIDE. THE BONDS ARE ON THE DEBT SIDE, AND THAT'S WHAT HAS TO BE PAID. RIGHT? THE DEBT SERVICE ON THE PROJECT HAS TO BE PAID BEFORE THE DEVELOPER FEE AND ALL OF THE EQUITY RETURNS COME IN. SO WHAT IS THE CITY'S LIABILITY IN 2036 IF THOSE BONDS HAVE NOT BEEN FULLY PAID? IS THERE ANY NO, THE CITY ITSELF HAS NO LIABILITY. THE PFC IS THE BORROWER. RIGHT. SO WAY THE BONDS WORK, THEY BORROW THE MONEY, BUT THEY HAVE, THEN THEY'RE A CONDUIT LENDER TO THE PARTNERSHIP. SO IF THERE IS AN ISSUE, THE THE PARTNERSHIP IS THE ONE THAT'S ON THE HOOK. THE WAY THAT THE BOND DOCUMENTS ARE DRAFTED, IT'S A LIABILITY OF THE PARTNERSHIP. SO NEITHER THE CITY NOR THE PFC HAVE LIABILITY, CORRECT? CORRECT. AND UNLESS YOU DO SOMETHING WRONG, RIGHT? NO, WE'RE NOT GONNA DO ANYTHING WRONG IN THIS, IN THIS INSTANCE, YOU'RE NOT GOING TO, YOU'RE NOT GONNA DO ANYTHING WRONG. NEXT QUESTION. SORRY ABOUT THAT. I SAID I WOULDN'T, BUT I'M GOING TO, UM, SINCE WE'RE BEING ASKED, AND SINCE I'M THE TREASURER, I'M BEING ASKED TO SIGN A DOCUMENT APPROVING THE TRANSFER OF THIS, THIS PARTNERSHIP SALE BETWEEN PARTNERS, CORRECT? IT'S ONE PARTNER BUYING OUT ANOTHER, IS THAT CORRECT? THAT'S CORRECT. UM, WHO HAS BEEN THE MANAGING PARTNER DURING THIS LAST, UH, FOUR YEARS? WHICH OF THE TWO? BOTH EQUALLY. THERE'S SOMEBODY ELSE. I MEAN, WHICH OF THESE TWO ENTITIES HAS BEEN THE MANAGING PARTNER? USUALLY THERE'S A MANAGING PARTNER IN A PARTNERSHIP. SO, SO THE PFC IS THE GENERAL PARTNER. I UNDERSTAND THAT IT HAS AN LLC THAT THAT IS A BUT WE'RE NOT, WE'RE NOT OPERATING THE FACILITY. CORRECT? THAT'S THE DEVELOPER PARTNER. SO THE, THE, THE SELLER IN THIS INSTANCE, THREE SHOOTING CLUB S-L-P-L-L-C HAS BEEN, THEY'RE, THEY'RE THE DEVELOPER FOR, THEY'RE THE OPERATOR AT THIS TIME. CORRECT. AND IS A HP HOUSING FUND 2 0 5 GONNA BE THE OPERATOR? NOW [00:10:01] THEY'RE TAKING OVER ALL OF THE, UM, SLPS RIGHTS AND OBLIGATIONS AND WE ARE COMFORTABLE THAT THEY CAN OPERATE PROPERLY? YES, NICK? YEAH, SO IN WHAT WAS DESCRIBED TO ME, THEY'RE ACTUALLY A LARGER ENTITY THAT'S MORE USED TO DOING THIS ON THE WHOLE, UM, SO, AND VICTOR CAN SPEAK TO THIS IF HE OBJECTS OR THINKS I'M WRONG, BUT MISSION IS TRYING TO GET OUT BECAUSE THEY DON'T FEEL THAT THERE'S PROPERLY LEVERAGED FOR THIS. UM, SO THEY'RE SELLING TO THIS PARTNER WHO CAN DO IT BETTER, ESSENTIALLY. OKAY. SO ESSENTIALLY AT THE END OF THE DAY, WE GET $400,000 TO THE PFC FUND, CORRECT? AM I OKAY. THEY COULD TAKE OVER THE OPERATION AND THAT'S WHO WE'LL BE DEALING WITH GOING FORWARD. AND THAT 4,000 GOES AGAINST THE 1.03 MILLION. SO THAT LEAVES A BALANCE OF 603,000 OR SOMETHING LIKE THAT. SO AFTER THE 400,000 IS PAID, THERE'S 1.03 REMAINING. OH, THERE'S STILL THAT MUCH. OKAY. RIGHT. AND OF THAT, OF THAT, YOU'RE OWED 40%, SO APPROXIMATELY $412,000 FOUR. CORRECT. YOU WOULD THAT YOU WILL STILL HAVE PAYABLE. OKAY. ANYBODY ELSE? ANYONE? ANYONE, ANY OTHER QUESTIONS THERE? ALL RIGHT. ALL RIGHT. NO MORE QUESTIONS. CAN I GET A MOTION IN A SECOND? GET A MOTION FROM COUNCILMAN WILLISON TO, TO, OH MY GOD. MOTION FOR COUNCIL WILLISTON. SECOND FOR COUNCILMAN SCOTT. PLEASE VOTE. YOU, ME READ IT. UH, I'D LIKE TO MAKE A MOTION THAT WE APPROVE RESOLUTION NUMBER 2025 DASH RO ONE A RESOLUTION AUTHORIZING THE TRANSFER OF THE PARTNERSHIP INTEREST OF THREE SHOOTING CLUB S-L-P-L-L-C, AND LIVE BERNIE HILLS LP TO A HP HOUSING FUND, 2 0 5 LLC, OR AN AFFILIATE THEREOF AND AUTHORIZING THE EXECUTION OF AN AMENDMENT TO THE DEVELOPMENT SUB AGREEMENT AND ANY OTHER DOCUMENTS IN CONNECTION THEREWITH AND OTHER MATTERS IN CONNECTION THEREWITH. SECOND FROM COUNCILMAN SCOTT, PLEASE VOTE. MOTION PASSES. SIX ZERO. THANKS, NICK. MOVING [6. BRIEFING AND DISCUSSION ON ANNUAL AUDITOR’S REPORT REGARDING DELIVERY OF BOOKS, RECORDS, ACCOUNTS AND FINANCIAL STATEMENTS.] ON TO AGENDA ITEM NUMBER 6 20 25 DASH 1 54, BRIEFING AND DISCUSSION ON ANNUAL AUDITOR'S REPORT REGARDING DELIVERY OF BOOKS, RECORDS, ACCOUNTS, AND FINANCIAL STATEMENTS. SARAH, GOOD EVENING BOARD. WE HAVE OUR ANNUAL PRESENTATION OF THE AUDIT OF THE PUBLIC FACILITY, BERNIE PUBLIC FACILITY CORPORATION BOOKS AND RECORDS. OF COURSE, THIS IS SOMETHING THAT'S REQUIRED BY THE BYLAWS. UM, THE PFC FINANCIAL RECORDS WERE AUDITED AS PART OF THE OVERALL CITY'S FINANCIAL AUDIT. UM, AND YOU MIGHT REMEMBER THAT THE AUDITORS HAVE COME AND MADE THEIR OPINION AND THE FINANCIAL REPORT THAT WE RECEIVED WAS UNMODIFIED, WHICH MEANS IT WAS A CLEAN OPINION. I DID WANNA TAKE A MOMENT AND GIVE YOU A BREAKDOWN OF WHERE THE FUND BALANCE WAS AS OF 9 30 20 24. SO WE BEGAN THE FISCAL YEAR WITH ABOUT 719,000 A FUND BALANCE SPLIT BETWEEN THE LIVE BERNIE AND ASTRA. UM, IF YOU MIGHT REMEMBER DURING 2024, THERE WAS THE SALE OF THE ASTRA INTEREST, WHICH LEFT US AT A TOTAL OF 3.105392 OF FUND BALANCE FOR BERNIE PFC AS OF NINE 30. ANY QUESTIONS? IT'S A VERY SIMPLE, UM, UH, ENTITY, VERY SIMPLE ENTITY, . I JUST HAVE A QUESTION. SURE. HOW IS THAT, HOW, WHAT DO, THAT'S IN SEPTEMBER OF 24. WHAT IS THE CURRENT BALANCE? DO WE HAVE IT INVESTED IN SOMETHING OR, UH, WE DO. SO THERE, THERE WILL BE INTEREST THAT WILL, UM, ACCRUE FROM THAT POINT. WE'VE ALSO HAD, IF YOU REMEMBER, THERE WAS A $50,000 THAT WE UTILIZED TOWARDS THE PARKING GARAGE. SO THOSE ARE TRANSACTIONS THAT AREN'T PART OF THAT 3.1 MILLION. SO THERE'S THE 50,000 THERE. WE ALSO HAVE ABOUT 50,000 WORTH OF ADMINISTRATIVE RENT THAT WE WILL BRING IN. AND THEN OF COURSE, YOU ALL JUST APPROVED THE 400,000? YES, WE DO HAVE, UM, WE HAVE THE MONIES INVESTED. AND IT'S EARNING ABOUT THE SAME AS THE CITY'S? YES. YES. IT'S IN, IT'S IN THE SAME INVESTMENT, SO IT'S ABOUT 3.6%. OKAY. ANY OTHER QUESTIONS? ANY OTHER QUESTIONS? ALRIGHT, CAN, UH, ALRIGHT, I APPRECIATE IT. THANKS, SARAH. NO, NO. DON'T NEED MOTION. I DO. NO. OH, THERE WAS NO ACTION NEEDED ON THIS ITEM. THANK YOU. ALL RIGHT. ALL RIGHT. AND THEN I GUESS THAT CONCLUDES OUR PFC MEETING. WE'RE GONNA OFFICIALLY ADJOURN AT 5:44 PM THANK YOU EVERYONE. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.