Flagstaff Housing Authority Votes to Launch RAD Conversion of 265+ Public Housing Units; Unprecedented Williams Acquisition Under Negotiation

Are we good? Yes, ma'am. Thank you. [laughter] Good morning, everyone. I'll call the meeting to order. [clears throat] And the first order of business is roll call. Moses. Here. I'm here. I'm sorry about that. That's okay. That's okay. Mayor Becky. Expected not Yeah, not attended yet, right? Okay. Correct. Ashley Page. I'm here. Thank you, Ashley. Lorena. Don't see Lorena. I don't think so. [clears throat] Nadine. Not present. Not present. And Tatum. Not yet present. Got it.

So, it Do we have quorum? Is there Do we We do because we would need four, right? So, we have you, Moses, Tate Ashley. Who is that three? Oh, you're right. Um Lori said she was supposed to be here, so I think that was who our fourth We have Ashley, myself, Brenda, and Tatum right? Yeah, we have Tatum, so that's four. Oh, Tatum is here? Okay. Yeah. Mhm. Tatum's not here, but Becky That's four.

The voice is kind of indicative of my brain speed and Scott's in the same boat so um And Mayor Becky has just joined us as well. Awesome. So, we are at and above quorum. Okay, good. We'll we'll continue then. Thank Thank you for clarifying it. Um we'll start out with an open call to the public. At this time, any member of the public may address the board on any subject within the board's jurisdiction that is not on this meeting's agenda.

The Arizona Open Meeting Law prohibits the board from discussing or taking action on an item that is not listed on the prepared agenda. The Commissioners may, however, respond to criticism made by those addressing the board, ask staff to review a matter, or ask that the matter be placed on a future agenda. To address the board on any item that is on the agenda, please wait for the chair to call for public comment at the time the item is heard. Okay. We'll continue on then.

Um the second item is approval of the minutes. You all were sent a copy of the minutes. I would entertain a motion to approve those. This is Ashley speaking. Go ahead, Ashley. This is Ashley. I'll approve. And a second? I'll second. I I didn't see who that Is that It's Becky. Becky, thank you, Becky. So, it's been moved and seconded that we approve the minutes as presented. Any discussion? Then all those in favor signify by saying I. I. Think we've got it. That's always hard to determine.

Got it. I heard no. Yeah. Yeah. [laughter] Motion carries. Um then we'll move on to action items. Um and item A, the consideration and adoption of resolution 2026-06, a resolution of the City of Flagstaff Housing Authority Board of Commissioners recommending the submittal of an application to US Department of Housing and Urban Development for HUD's Rental Assistance Demonstration RAD program.

And the implement implementation of the redevelopment of the Flagstaff public public housing portfolio um with the City of Flagstaff Housing Authority as developer {slash} co-developer recommending the City Council and City Manager or their designated take all action necessary to implement and operate all phases of the redevelopment and disperse public housing and or affordable housing funds for related projects. That was a mouthful. Who's going to speak to this? [laughter] Sarah, is that you?

Okay. It's me. Go for it. And it looks like Lori has just joined us. Good morning, Lori. Thank you. Good. I know this is going to shock you. However, I did not write that. All of the attorneys wrote that. Um so you're like, huh, that's kind of long. I even made it a little shorter. So uh board, thank you so much. We've been talking about this for a very long time. Um I'm going to give you a snapshot of what it is to start with.

And it is authorization for us to submit an application to HUD execute documents resulting out of that. Your function is as a recommending body to City Council. So this uh resolution overall recommends these actions to City Council. City Council may add things to this when it comes to them. As you're listening to this, as um you're absorbing the information, I want in your heads that we can get out at any time.

If we submit this application and we are unable to reach consensus with HUD on something that is long-term financially viable for us, we can say, "Thank you very much." and walk away and maintain our current structure. The risk associated with turning in this application is extremely low. So, as you hear about this and it sounds scary at some parts, be completely honest.

Um until you think about the fact that we're at the application stage and giving us some authorization to go find a co-developer, that type of thing. Um we're going to do this in two parts. First, I'm going to share with you the presentation we gave at two resident meetings yesterday and share some of the feedback we got and questions we got. Um I'll share the punchline there early is there were very few substantive questions. We got a lot of thank yous for sharing information.

We got a lot of questions, um on personal items, screen door handles, that type of thing of where we're like, "We'd turn in a maintenance request. Let's chat about that." that type of thing. Um so, I'm going to start with that presentation. I'm not going to go as slow as I did with with um the residents. There's a lot of focus on resident rights. I spent a lot of time on these slides with them. I spoke for between 45 to 50 minutes. Um taking questions as we went. Um with them.

I'm not going to spend that much time on the slides with you. You've heard a lot of these concepts previously. So, as I go through it quickly, please know this is not how we did it with the residents. Um for very important reasons. So, I am going to I'm going to share my screen. You're going to see your beautiful faces for all of Oh, no. You're going to see the draft of this until I hit play. Let's see. Go to slideshow. Are you now seeing a slide that says preserving your affordable housing?

Awesome. Okay. So, again, this is the presentation we did with our uh public housing residents yesterday. We sent them a massive packet of information with plain English cover sheets on the front because there's a lot of HUD speak in the required documents that even confuses me.

I want to thank Adriana, who I see is online with us, for spending significant time on turning documents into plain English documents so that our residents can understand um had an easier introduction to the information rather than the solid HUD speak. So, we did an introduction of staff. What is this effort? Rights, what stays the same, what changes, why is it happening, and what's proposed. Um staying informed along the way, how to get involved, questions and feedback.

So, we started with this. Um this is what was at the top of their packets as well. It's the first things for you to know. You are not losing your housing. You do not need to move or make plans to move right now. And there are multiple opportunities for you to be involved in this process. This is the information that was at the top of the packets that they received.

Um as you know, we've talked about many times that it is incredibly important for people not to be worried um or concerned about losing their housing through this process or losing their subsidy. I told folks, I don't want you laying awake at night. I don't want sour tummies. We want you to understand that this is not your housing is not in jeopardy. Changing slide. What is this RAD effort? Um we're applying to work with HUD to preserve affordable housing long-term. HUD calls it RAD.

We'll call it this effort or the RAD effort for the purpose of the presentation. Public housing funding becomes a long-term rental assistance contract under a different program, which can fund repairs and improvements to rebuilding from minor repairs to full development. The required HUD documents that we have to send to folks mention that it's a long-term rental assistance contract under the Section 8 program.

So we wanted to be very, very clear with people because when they hear Section 8, they think subsidized programs, they think vouchers. Section 8 has other programs underneath it. And so the funding shifts from public housing to a long-term Section 8 rental assistance contract. And that contract makes it easier for uh makes [clears throat and laughter] that contract funding makes it easier for us to get money to repair and improve the property. This is not the Section 8 voucher program.

It means we will we we will have a Section 8 contract for the units instead of a public housing contract. Um we did have a I believe a question on this one clarifying. So we say like yes, the the subsidy is attached to the unit. It is not a voucher. But because it says Section 8 in the documents, and even the city the William city manager called me and went, "What?" Um he was thinking things were converting to vouchers instead of units.

Um we wanted to make sure that folks understood what was going on there. [clears throat] Goal keep the property affordable long-term. Super important, protect current residents and their rights. We added minimize impact on current residents. Um so that we're not asking people to move 27 times. We're doing this in a way that if they need to be temporarily relocated and excuse me, if they need to be temporarily relocated, that we're doing that with thought and intention.

So it's not oh, now you need to move. Oh, now you need to move. Improve the property and address building needs. Maintain public or nonprofit ownership or control. And increase the number of units. Um if if nonprofit made your chest hurt, hang in there. We're getting to it. Um what Well, let me go back. What I told residents on this slide was don't let this public or nonprofit ownership or control scare you. It will still be the city and the housing authority.

But we may we will need different legal structures in order to accomplish what we need and protect um from liability the organizations. And I go into this much deeper with um with you for the board resolution. So key resident protections, we said this like seven times. Your rent remains affordable. There's no re-screening because of this effort. And you have the right to remain in the development after any rehab or redevelopment. To return if temporary relocation is needed.

To organize and participate to grievance and hearing procedures. And there's an option to request a tenant-based voucher after a required waiting period. I'm not going to spend much time here. It's fair housing uh protections. They're the same fair housing protections residents enjoy now. There's not different protections um because of this process. Um but we went one by one by one. Um we we said is particularly we said I'm just going to say I cuz I talked a lot.

Um if you have a disability, uh you can request a reasonable accommodation. Meetings and materials will be accessible to you. We offered that if there's someone who has a disability that makes it difficult for them to get out or they're not comfortable coming to meetings, the housing authority staff will meet with them either in their home or in the office, at a park bench, wherever they're most comfortable in order to get questions answered and allay any concerns.

Um that we really want people to feel comfortable. We ask people to go back and talk to their neighbors and share information and let them know that we really mean if your stomach hurts, call us. Let's chat. Let's talk about what it is um so that you're not worried about your housing. Thank you to Adriana. We have um someone who can There we go. We have a specific um email address to us.

The rabbitflagstaffaz.gov is a general shared mailbox where um and we'll be sharing this throughout the entire process. People can email questions, concerns, rumors. We dispel some rumors. If you've heard it, NAU is not interested in buying Brannen Homes for $90 million or if they are, apparently for the last 10 to 15 years, they have not approached us about doing so. So, no. But apparently that one's rampant. So, we had we had that question three times.

Um and so this email address um um we're able to forward from there the email or the question to the right staff member if it's not a generalized question that folks manning that email box can um handle and then or call write this down in black permanent marker on your computer screen. This is Scout's phone number direct to Scout. Want to talk to Scout, there we go.

Um but she's going to be the the point person um so that we're not shifting people around for questions if they call and we don't know um we don't Brenda's writing it down. Scout, be careful. Once she gets your number you know how she is. Um so we get so that Scout can direct those questions to the right staff person and we're not having somebody bounce around within our systems trying to find somebody to ask their question to.

So we're really trying to keep things direct so that folks aren't calling and going through the file tree. Um a gentleman asked yesterday if we would be utilizing AI. He wasn't fond of talking to AI and I told him he could have human beings but it might be a voicemail to start with but then a human would call him back. So um the proposed plan so far and I talked about this very important word right here is the proposed plan so far.

We're not using our proposed plan so far because we haven't talked to the residents. And that we needed a starting place for a proposed plan so we could get things started but we're at the very beginning and very few decisions have been made. And that once we have a plan where we have resident input and it is our plan, we'll change that language. But right now it's the plan because it's not something that we own together with our residents.

So our plan like to apply to HUD for this effort, it's required that it be part of our five-year and annual plans, and we've had it written in there for several years. We shared that Seiler Homes is the first property being reconsidered for redevelopment. We talked about why with Brandon Homes to follow. Scattered sites impact is not yet determined, and that we'll keep those residents informed. Each project will add more affordable homes so that we can house more of our neighbors.

Mentioned to the groups that we have the um we have a local priority. So, we're not building additional units to serve people off the waiting list coming in from Chicago or coming in from someplace else. Um because we will house our Flagstaff neighbors first, and that we will be seeking a development partner. What changes for them and doesn't change? What doesn't change is rental assistance continues. Rent stays based on 30% of adjusted income.

There is no rent increase for most residents because there is one exception, and that is folks on flat rent. I've checked with Anna. Thank you, Anna. Um on we have less than 10 households out of our 265 that are on flat rent. So, the impact here will be um will be minimal, and it's not guaranteed that flat rent will increase. It's just a different calculation, and we can't on an annual basis guarantee that piece. And then again, there's no re-screening because of the effort.

What does change is folks will sign a new lease. There's nothing crazy in here. Um it's under a different program. It will explain very, very similar rights and responsibilities, perhaps using some different language because it is under Section 8 regulations instead of public housing regulations, but there's nothing crazy within that lease. Some residents may not have to move. So this is a big question that I know is sitting in people's heads. We did an if then.

If no move is needed, you stay in your home. If temporary move is needed, advanced notice will be provided as long as along with help with moving costs. Um HUD requires us to give a 90-day notice. That's the um minimum notice we can give. Once we have knowledge of if people are needing to move, we will give that notice and it well in advance of 90 days if we can. Um and when the work is complete, you have the right to return to the development.

Now there's a difference between a temporary move, which is defined as less than 12 months, and relocation. Relocation is defined as a move in excess of 12 months. There may be um this may be the circumstance we encounter with redevelopment. Um full apartment buildings may not be able to be completely constructed within the 12 months depending on our building season. Advanced notice will be provided. Again, it's a minimum of 90 days. We would give as much as we can.

We must provide an explanation of when and why a move is needed. And we'll provide information on moving assistance and relocation rights. And then we bleed over into the next slide. Which if I had if I had to do this presentation over, I would have um put this on the previous slide, but we're here, so. Um housing choices, other housing affordable options may be offered. When we get to this point in the effort, meaning not now.

Again, residents do not need to be worried about moving, packing anything. They will get to choose if the relocation is over if it we if we're dealing with relocation, not just a temporary move. Residents get to choose to accept another option or keep the right to return. That other option um is potentially um a voucher. Um giving up the right to return must be voluntary in writing and we will provide information, counseling, and at least 30 days to decide.

And I clarified that counseling is not therapy, darn, but rather our staff being willing to sit down with the household, talk about what their housing needs are, and what works best for their household. This is not us making the decision. I was very clear. This is not the housing authority telling you what to do or where to go. We will sit down, help outline the choices that are in front of you, um so they they can decide what best works for their household. I love HUD.

Um This [laughter] slide to me is somewhat silly. These are the required questions and answers we're required to cover in the meeting. Um will there be repairs or construction? Yes. At Siler and Brandon Homes, the scope is still being determined. Scattered sites, we're not sure. These homes are still under review. Are there plans to move the affordable housing assistance to a new location? We could sell the property, take the money, and move it someplace else and put the subsidy someplace else.

We do not have plans to do that at this time at any site. These are our neighborhoods. This is where folks have built their lives. Um it doesn't make sense to um to do this. Are there plans to partner with another affordable housing organization? Not at this time. I don't have a yes or no on this. We do plan to partner with a co-developer. Will there be a change in the number or type of units? Yes. The goal is to at least double the units and add a mix of housing types.

Explained what that meant um because it doesn't mean much to folks that aren't in the planning or development community that we're not talking about rows of six-story apartment buildings. We're talking about some apartment buildings maybe three stories. We're talking about some housing that looks like townhomes, maybe some cottage style, something that looks like a neighborhood rather than a homogeneous [clears throat] um construction of the same unit type over and over and over.

They could be duplexes. There could be X, Y, and Z. So, what we explained to them what a community planning charrette is and that's just a fancy word for coming together to figure out what you want the neighborhood to look like. And I told them we do have some um preliminary drawings that are simply put together for folks to have something to respond to so we're not starting from scratch. It's like a straw man. It's meant to be knocked down. It's meant to be like, "That's silly.

I don't like that. I do like this. What are" So, we hit really hard. We want to hear from them. What are their needs? What do they envision um their neighborhood looking like. I asked um I said I we want to know what the neighborhood feels like when they enter it um that type of thing and that's how we'll structure those input sessions. Then we got into some really procedural stuff.

There will be notices and updates throughout the process, multiple meetings to learn about, have input into the plans, ask questions, and share concerns. Resident councils and associations may meet independently. There's a slide coming up on that. And we must consider resident comments and concerns, give written responses, and submit them to HUD.

All the questions we got yesterday, um Aidan, I don't think Aidan's on, is in the process of reviewing that transcript, um and making sure that we will publish question and answer even for the questions that were not necessarily related to what we were talking about. This is so that HUD can see and make sure that we're paying attention to it and also will help us build a very useful FAQ um for the questions that are relevant to the process. So, right now we don't have any resident organizations.

That can be viewed as a positive and that can be viewed as a negative. In the past, my understanding is we have not had functional resident organizations in my 11-year tenure over here is that folks feel heard, they don't feel the need to organize and speak up. Um the other view is we should have them um so that we have a point group to work with. Um and that resident organizations can be very, very powerful. I don't really have an opinion either way.

Um I can tell you I said we didn't have them. They were dissolving as I got here and they were struggling with membership. People were not interested in attending. Um there has not been a huge outcry. Um we mentioned to them that house that house housing staff would help them if they're interested in this organized groups, that there are limited resident participation funds available to do so. They still retain their rights to grievance and hearing procedures as individuals.

And that um well and as a group too but that we would help organize and get out of the way. So I wanted them to know if this is something they're interested in doing, we can help set it up but then we're going to get we're going to go away and it will be their organization. Um we talked about choice mobility and let's eligible residents move to a different home using a voucher after a waiting period.

I admitted straight up to them that I am not as versed in this piece of the regulations because this is way down the road. And um I will be better at it before we get there. But what I do know is that residents can choose whether to use this or not after a waiting period um within the new development if they choose to return and if they choose not to return then the voucher comes at that point in time. Residents may request a tenant-based voucher that can be used to rent another home.

This is fun. The waiting period is one or two years. I ended up saying depending on a few factors because my research at one point there was some interpretation of HUD guidance that said this is a weak spot and an unclear area of HUD's guidance and regulations that there's conflicting pieces within the guidance of if it's one year or two years etc. I stopped digging because we're not there yet. Um so we know that there's a waiting period.

It depends somewhat on the form of um the form of how the subsidy is recorded. I didn't go into that level of detail with the residents. And I said more information will be provided before we get to this point but this is years down the road. Resident notices um I won't walk you through this step by step but we are here before the application. Those are the notices they received. Different between notices and communications is notices are dictated by HUD.

Specific language that we have to use and they're very formal. These notices are the minimum. We've [clears throat] told residents they can expect more frequent updates including in the monthly newsletter. Aiden has agreed to write a RAD corner or a project update corner in the newsletter. Um so that every month residents can check and see. And I said some of those updates are going to be really boring to start with.

That's going to say we published a request for proposals to identify a co-development partner. Um that it's it's going to be boring for a bit. There's no dirt moving. But things are happening and that's the other reason we wanted to do monthly updates is so that people don't think we had this meeting and then they see nothing for 18 months and then all of a sudden we're like, "Guess what? Things are moving." So we really want them to know we're working through that process.

Um when will meetings happen? At least two meetings before the application. That's where we were. We had one both remote. Uh both um mixed. What am I saying? They had we had people online and we had people in person. Um and both were recorded and will be posted so folks can watch them. Um at least two meetings before the application. We are here. This is where we are. At least two more meetings after HUD accepts the application and at least one more meeting before the conversion is completed.

Additional meetings for your input and questions will be held as progress is made. This is the minimum. To me this feels way not enough. Um and thank you for letting me have a slow brain today. This is not This is not enough information if if my housing's being impacted. I told them they'd be tired of um, hearing the word meeting before we're done. How to get involved? Attend resident meetings. Ask questions, share concerns and ideas, read notices and updates.

And on this one, read notice and notices and updates, I told them we make an effort to bold areas where you need to pay attention. So, if it's something long and you just want to look for the bolded areas and read the bolded words and see if that's something that concerns or interests you and read that point, that's fine. But, look for the bold. Um, and then always contact housing authority for more information.

[snorts] This language was also in their packets is um, there is a lot of work to be done before any changes to buildings or land are made. It will likely look like nothing for at least a year. And I explained how all the paperwork, I didn't explain all the paperwork.

I said there's a lot of paperwork and there's administrative things to be done and it's going to look like nothing's happening, but to watch the newsletter um, both for what is happening and future updates for folks to share ideas on what you would like your neighborhoods to look like. After the meetings, I had folks come up to me and I heard everything from it would be great if there was um, a dog run for our um, assistive animals.

She said there's seven dogs in Brandon Holmes and um, I have it costs money for me to get over to the Bushmaster dog park or the Thorpe dog park and so my dog's always looking to run out the front door to exercise um, when I open the door and it'd be great if there was a place to do that all the way to I've been in construction. I retired from construction after 50 years and I'm worried about the burn walls between the units that were built in the '70s and I know those standards have changed.

So, the gamut of things people came up to talk to us about afterwards was was really really broad. Um and we heavily encouraged folks to come share ideas on what they want their neighborhoods to look like. Mentioned the getting permission to apply for the RAD program. We have this meeting this morning. City Council for a presentation on October 27th and potential action on approving an application on November 3rd. This is the slide we had at the beginning. I went over the exact same information.

You are not losing your housing. Please share this with your neighbors. You do not need to move, etc. And then any questions. Um we had some substantive questions. Um where's the money coming from? Um is it still going to be um the staff that we know or is it going to be other folks? Um we talked through some of those. Our staff um has been fantastic with this, which I really expect nothing less. Um and uh we had our public housing manager present.

We have the housing services specialist for the property that presentation was aimed at present. Um and myself. Scout was there. Justina Costa from Housing Investment uh was there to support. Adriana was online. Aiden was there helping get set up. And I heard some things about staff that I want to share with you. Um and I I'm tired, so I might cry.

But I had somebody talk to me about how there are times where in their lives where they've applied for assistance or not been able to provide for themselves where they have felt very shameful in applying for programs and I said something to the effect of I certainly hope that you have not felt that way with us and she said, "Oh, no, never.

I have never felt disrespected by staff, undervalued, not heard, etc." Now, I know we have residents that would say the same in the opposite depending on their their personal experiences and attitudes.

I also had a woman come up to me and say that she um is here and present in our world because of Laura at our front desk and she said, "I've had a really hard time transitioning to needing support." Um she has a number of disabilities and she said that there are times where she considered ending her life and one of the main reasons she's here today is because how Laura at our front desk was patient and kind and answered her questions even when she asked the same question over and over because of her anxiety.

Um and she said, "I don't think Laura knows. Laura doesn't know. I came in, had a meeting with lawyers and now I'm here with you, but she will know. And we will figure out a way to honor her special um this special feedback that we received." This woman choked up and and started to cry a little bit in talking about this and said, "I'm here because of Laura and her patience and her kindness and her willingness to answer my questions over and over and over.

So, while I know that there are times where you guys get emails or complaints about our staff, we also sometimes get very moving personal feedback. I went up to my car and sat and teared up for a few minutes because it was really it was really great. We started the meetings with some of this and very closed body posture. By the end of the meetings, body posture, except for one gentleman at the first meeting, opened up. And people were leaning forward more, they were nodding.

Questions increased as things were coming. There was one gentleman at the second meeting that I thought I'd lost because at the beginning of the meeting he was sitting up and he was interacting and smiling and then by the end of the meeting he was completely bent over. Well, when he stood up to leave the room, his actual body posture is completely his spine is completely curved down. So, when he was sitting up at the beginning of the meeting it was his unnatural position.

But as he maybe got more comfortable, he let his his spine relax into its natural position for him. So, I met some great people yesterday, had some good conversations. I know other staff had conversations and that is what we shared with the residents yesterday. We had We have sign-in sheets, so we do have official counts. I want to say we had probably about 10 or 12 at the first one and probably 10 at the second one. That sounds very low. I agree.

Of 265 households, these are not fantastic numbers. However, meetings aren't everybody's thing. We're agreeing to meet people where they are and the packets had a lot of information in them. So, we'll make sure that there are other opportunities to share information. We also asked residents to let us know if there are better ways to communicate with them, if small group meetings make sense, if different days and times make sense, and we'll do it again.

So, we asked them for that feedback so that that we know what's going to work best in communicating with our residents throughout this. I had some folks share that they were worried when they came into the meeting, and they left much, much more comfortable with what was going on. So, thank you for listening through that piece. That's what we shared with residents yesterday. Mayor, I'm sorry, but you're going to sit through that again um next week. Or no, in 2 weeks.

Um with city council, we'll share it. I'll go faster. I'm just going to increase my speed as we go. Are there any questions about that piece before we move into today's action with the resolution? It was a great presentation, Sarah. Thank you. I wish I could say I wrote it by myself, but I didn't. I had um help and assistance from Adriana who put the base together, which I was so, so grateful to operate from.

I'm going to switch over to a presentation today about the resolution, and we'll walk through that. Nope, that's not the right presentation. Here we go. And over here. Give you your patience while I do tech things. Aha. Nope. [laughter] I have it up on the screen, but now I lost my share box. 2 seconds. I did it in the wrong order. Share your beautiful faces. And then emails, and my email, go away emails. And Great photo. Thank you. I haven't looked it up yet where it is.

That's the Bing photo of the day, but I'm guessing maybe Prague or Germany or Switzerland. All right. Can you now see something that says resolution 202606? Yes. Excellent. Thank you, chair. All right. What we're going to talk about is why this resolution, what it does, redevelopment projects, how things get built, what the implementation authority is, and then what we're asking you to approve today. Why this resolution? This is not news to you.

Federal funding for public housing has been shrinking for years, and our local housing needs keep growing. We have a declared housing emergency. Our properties are aging and need reinvestment. And this resolution also supports implementation of the city's 10-year plan by protecting and expanding long-term affordable housing. The resolution recommends City Council authorize staff to apply to HUD for RAD program, g r a m. I love finding typos while I'm presenting.

Um RAD converts public housing assistance into long-term rental assistance contract, the same program covered in the resident presentation. It recommends that CFHA, the housing authority, serve as developer or co-developer on the resulting redevelopment. Um the RAD program actually requires that we uh maintain majority um control of any subsidiary created, so that um cannot be taken out from underneath public control.

The redevelopment projects, it covers everything Cutler Brannon scattered sites. It plans for a mix of housing types including family and senior housing and it mentions that we aim to significantly increase the number of affordable homes available at the sites. How does it get built? Hang tight with me. The next slide has more detail for you on a new nonprofit corporation being recommended to be formed to help with very various elements of the development.

The financing to get this done will combine tax credit financing, grants, loans and the city general obligation bond funding from prop 442 which is not city general funds, it's from the bond funding and there's 5 million there. A qualified development partner will be selected to help design, finance and build the projects. Hang on now, you said a new nonprofit. I know that sounds scary especially in a community with so many nonprofits.

You'll see some changes on this slide than what's in your packet uh because I ran it past um our outside attorney this morning and she's like, I wouldn't say it that way. I went, okay, how would you say it? So, it would be at the request of the city. No new staff, no new funding to start with. I added to be determined long-term.

When I say no new staff, no new funding to start with, the cities in Arizona that have done this Tempe, Maricopa County, City of Phoenix, City of Chandler, Yuma, Pima County, um have we're following models done within the state. This is an identified best practice because the in the nonprofit structure, sorry I'm reading to but these are my words today, is less about who runs day-to-day operations and more about legal structure of how things happen.

They're not directing, you're not approving a new nonprofit to be formed necessarily. The recommendation, this is straight out of the resolution, is to form a new nonprofit corporation with the housing division director of housing authority, that's me, working with legal counsel on incorporation, governance documents, and submission for 501c3 status as directed by the city manager or their designee. So, the city council decides this is not a direction that we're going.

We will work to figure out another way to do it. But why would we do it is one is satisfying HUD's control requirements. So, generally, a housing authority can't contract with itself. The city can't contract with itself. We're part of the city. So, when a property converts and gets project-based vouchers, the PHA can't be both the owner signing the housing assistance contract and the party administering it. So, the creation of a nonprofit entity helps with how ownership and funds flow.

Um The ownership entity is also needed to hold the property so that we can project-based assistance there. If the per prop If the portfolio moves through a Section 8 disposition, which is under consideration for some of our scattered site homes, we will bring those decisions to you when we get there. HUD rules that the public housing asset to transfer to a separate entity recognized under state law in the first place.

So, if we were to say right now this is a public housing unit, single-family home sitting up in Lower Greenlaw, and we are going to no longer have it be public housing. We're going to attach this Section 8 contract assistance to it. That legal transfer doesn't come to the housing authority. That legal transfer must go to a separate entity, um which is us. Um One of the bigger pieces in this is financing.

Is LIHTC deals do have to be held by a single asset ownership entity structured with a general partner who runs the project. That's us, a limited partner who supplies the tax credit equity. And typically a PHA or its affiliate, which would be this nonprofit, um [clears throat] Excuse me. Um do do do, let me find it in my notes. Do do do. PHA or affiliate typically fills that general um partner role, and HUD requires the PHA to retain control of the converted property.

So, we're not losing control of our assets. Commonly done by holding 51% or more of general partnership or a managing member. Nonprofit affiliate gives CFHA, us, a clean vehicle to hold that controlling interest without exposing the whole housing authority or city to a single project's liability. And since LIHTC lenders and investors generally want risk to be isolated to one asset, there's also a fund source issue here where this makes sense.

LIHTC transactions typically require um tax credit construction, repurchase, and an op operating deficit guarantees. Those have to be backed with non-federal money. All of our PHA money is is federal. So, we can put that 5 million um from the bond funding um in for a purpose like this. I don't know if that's the plan. It's a This is how it could work.

Um, and then the the since our PHA funds are federally restricted, the nonprofit affiliate can hold developer fees, defer developer fees, and other non-federal resources that help make those guarantees possible. Um, is there one other reason that I'm looking to do do do do. It gives us more flexibility down the line as the nonprofit can hold or manage other properties and pursue foundation funding that wouldn't otherwise directly flow to a housing authority.

There are a lot of There are not a lot of There are some fantastic not enough housing nonprofits in our community. We would not be looking to create this nonprofit to go compete for funding that we already know in the community is limited. Our nonprofit partners do fantastic work with the money that they receive. I do not foresee us going knocking on doors unless we're partnering with those folks and we do it together, um, to compete for the limited funding that's within our community.

Now, may there be a time where CDBG funding goes to assist with this project? It could be, um, but typically those funds go out into the community. Before I go any further on this, are there questions about why a nonprofit? Oh, well, that's why we don't have questions is Moses is in the lobby. My apologies. I guess the winds have knocked out my internet connection and now I'm on my phone's data service. Apologies about that. No worries.

I just asked if there were any questions about this part and then I paused and then you popped up in the lobby and I'm like, well, that's why there's no questions at this point is cuz Moses is in the lobby. So [clears throat] Actually, I don't have any questions cuz this is a fantastic presentation that's answered them all. Okay. Yay. Um All right. I have a question, Sarah, if we can just real quick. So the nonprofit would be made up of can you tell me?

I mean It would be be made up of other nonprofits or not? It's just individuals. I mean, I don't I don't quite get that part. The other communities trying to pull up so I can see your faces and I'm not being successful. Um [clears throat] where this has taken place in other communities around Arizona um and in other areas of the country, it is typically as an instrumentality of usually um a housing authority.

And since the housing authority in Arizona are part of municipalities, it would be made up of housing authority and city staff. Typically, we could see the city manager serve as president of the board. I would be the executive director. No, that doesn't come with a raise. Um the existing staff existing city staff is used to perform the functions of the nonprofit. Okay. Um until there is until there's funding.

Tucson is at the point where their developer fees coming in is able to support a staff member. Um Tucson's much larger. They're looking at much larger development projects etc. I don't necessarily see that being an option for us. This would really be um a a legal tool in order for us to be more successful in what we're doing with um our development partners. Got it. Thank you for explaining that. You're welcome.

And I think the other thing that's really important is we're not looking to go out and compete for funding with what our local nonprofits go and look at. There might be a point where we need to do apply for some state funding. I envision sitting down with our state with our state with our local partners and find out who's applying for what. If somebody else has a project we have different resources. Um might we go after um things that aren't typically accessed by our local nonprofits? Yes.

But the more I look at this, the more strength it will give us um in order to be able to um potentially bring additional funding to the table that we don't typically see in our community. We're negotiating with a developer right now. We're almost at the public point. But they have said that if we have an nonprofit that can hold an asset, it opens up different forms of equity for a different project that we're working on.

And so there are different financing tools coming into the market that right now we don't have access to. And so um we're excited about those tools. We're also a little I mean you've met our legal department.

We're cautiously optimistic about how that can work what um it can be, but our legal department is is in step with us as we move forward looking at how this can look, how we can do it, how we're not setting up something that takes over or um negatively impacts our other affordable housing partners or providers in the community. That's never our goal. Um and I know that there will be some concerns. Um I've talked to housing solutions. I didn't have as many answers as I do now.

Um but I think when I sit down and go over with them really what this can look at and why it makes sense for us to do so, I think they'll have a better understanding of of what it looks like and why. So um and city manager has said, "Go forth and figure out." So that's why I'm changing language cuz attorney this morning went, "I wouldn't say it that way." [laughter] So I'm so grateful for Travis.

Um so in within the resolution it directs the city manager or their designee to take actions necessary to carry out the resolution, which includes signing applications and agreements that HUD requires to move the process forward. We will keep the board and city council informed throughout project progress. Clicking. What we're recommending that you approve is recommend city council authorize us to submit round application to HUD.

Recommend the city council approve CFHA as serving as a developer co-developer on redevelopment. And to support the city manager's designee in taking the next steps to carry this out. We're going to go to city council twice with this once in a work session. This is not a decision meeting. This is a discussion meeting on October 27th. And then the res a resolution that reflects actions the board takes today within it. Um and we'll have a likely additional um direction within it.

Um on November 3rd. Of course, these meetings are in person, but also available via YouTube. [gasps] Um options in front of you today board to approve resolution 202606, to not approve it, to recommend um amendments. We covered a lot of information and I'm really happy to answer any questions that you have. Looks like you're good, Sarah. Like did everyone for their screens freeze? Um Okay. [laughter] All right. Um if we're done with the meeting, oh, there we go. All right.

I'm really sorry, Sarah. I hate to ask this question, but I feel like I need to and it's going to sound really I don't know. I don't want it to sound arrogant, but I've been moved forward with the potential of becoming a council member um and the interviews are today after this vote.

I don't what I'm asking is whether or not I would have to recuse myself as a city council member if I were to be so lucky as to be selected from voting on this as council member if I vote on it today as housing authority board member. I'm going to punt to the mayor. So, I think thank you for the question. One. Two, congratulations on being moved forward. I thought about this last night and I came up with two answers. Um [clears throat] one in both directions.

So, I would like to ask Mayor Becky if she has any input on this and Mayor, if you don't, that's fine. Um I also believe given the number of folks we have at the meeting, an easy solution would be, if we don't have a a solid answer on this, for you to recuse yourself from this vote, so that if you are successful in being appointed to City Council, that then there isn't a question on you voting on it when it comes to Council. Mayor, do you have any input? I'm going to go with no on that one.

Um, make sure I'm not missing a message from her. Okay. Um, Moses, I support you in whichever, um, What I'm going to do is I'm going to abstain from voting. And [clears throat] today, and I'm not going to get into the discussion of a yes or no here for the the fairness aspect of this. If I do happen to be appointed, As a just in case. That sounds very very safe. Okay. Thank you. No, I appreciate the question. All right. If there are no other questions of Sarah, I would call for, um, a motion.

And that motion would be that you approve We move to approve resolution 2026-06. This is Ashley. I move to approve resolution 2026-06. Thank you, Ashley. And a second? This is Becky. I'll second. Thank you, Becky. It's been moved and seconded that we move to approve resolution 202606. All those in favor signify by saying I. I. I. I. Chair will you please note that we had sorry go ahead. That's okay. Yeah and the anybody that is favor this signify by the same.

And please make a note that Moses Molano has abstained from the vote. Motion carries. Sarah, that was a great presentation. Thank you. You guys have put a lot of hard work into that and we've talked about this for a long time now. We have. It's both exciting and terrifying to be at this point. I recently told council that we were on the edge of jumping off a cliff and I feel like we've we've jumped off the cliff. It's scary and it's exciting. [laughter] So here we go.

I mean we've been talking about it. It's been things that we've discussed it and I really appreciate your support in forwarding this to city council for a final decision. We will pay attention to what's going on. Do you have anything for your director's report? I have a couple things to share with you for director's report. One is this is Laurie Knap's last meeting. I understand Laurie that you're moving out of our community.

I wanted to say thank you for your service on this board especially as a participant member and that we wish you absolutely the best in your future endeavors. I do realize that this is um a volunteer commitment and I am always grateful for folks that show up and volunteer to support uh housing within our community. So, thank you, Lori. We really appreciate it. Um I want to tell you that Scout has hit the ground at a full sprint, not a jog, and has been providing fantastic support.

Um and and I was thinking, well, you know, we'll structure when things move over. She's just like, bring it. Give it to me. Get it off your plate. And is doing a great job, which I really appreciate. Um I also want to recognize the fact that that was a fantastic presentation. And I did not do that by myself. I was the voice of it, but there's a huge Well, there's not a huge team.

There's an an amazing, strong team standing right beside me, surrounding me, enabling us to move this forward in a professional manner. And for that, I am very, very grateful. Um we could not do what we do without the continuous commitment um of our staff. And I am looking and I don't have an answer to that question yet, so I'm not going to go there. Um I have mentioned to you previously that we've been approached by HUD about Williams public housing.

Um and the condition that I put on even discussing it with them was that it needed to not interfere with our rent our RAD transaction. And I asked for something that HUD said, we don't do that. I said, those units need to be converted to a different to to be not public housing. They need to be converted under RAD to a Section 8 contract before we'll consider taking them. And the initial responses I got several times were we don't do that, we don't do that, you wouldn't need to do that.

And I said, I don't have time to do that. Um you're asking us I and would we have done it if we had to? Probably. Um but HUD's doing it. And we've had some Yeah, we've had some folks show up um out of Chicago office of special applications, HUD's special applications who came in and said, we've never done this before. And I said, oh good, me neither. We can figure it out together. The HUD has given the RAD notices, they've had their resident meetings.

Um and they'll be back when their environmental reviews are done um in 60 days. And um they are encouraging us to take that whole asset, land, buildings, etc. um and as not as public housing under a Section 8 contract. There's still a lot of work to be done and a lot of things to be figured out. But they've so far put their actual money where their mouth is. And um so standby. We've made no commitments to do this. We have said we will consider, but we need full financial information.

The financial information is what I'm missing. I do know that they have heavily invested in their units recently. There's new roofs. Um the previous maintenance issues that we were informed of um have been resolved according both to HUD and to Williams. I've chatted with the mayor and the city manager repeatedly. We are not This is not a hostile thing. It's not like the city of Flagstaff is taking over the units. This will get Williams out of default on those contracts.

Um and they don't they've said they don't have the capacity to operate the units. The commitment that I have personally made to them that I feel that council will be comfortable with or I would not have made it is if this happens we have the ability to sell it. We can sell it to a for-profit landlord. And I told the mayor and city manager that upfront so that they didn't hear it later and think I had a devious plan to do so.

I said we understand the value of affordable housing in in our community, in your community and if we were ever to dispose of the asset we would um sell it to an affordable housing provider. Someone that agrees to keep it affordable in perpetuity. We would not suck the subsidy out of it. And so does it mean we would be administering it long-term with our staff? Potentially no. Um but at the beginning yes. Again, we've signed nothing.

I've made no commitments other than if you want us to consider this this is what has to be done. And they're they're doing it. And I've talked to folks around the state and never heard of HUD doing this. Um and the HUD staff themselves have said we've never done this. We don't know but the two that have visited us are the ones that when we turn in our application it's going to their desk.

And so that's been helpful to meet with them twice and they've given us some guidance and some um words of wisdom on places other folks miss so that we're in a we're turning in complete applications etc. So there has already been benefit to us because these are the folks that will be reviewing our applications when it gets to their office. So stand by. Again, no commitments other than if it happens, we agree to keep it as affordable housing within their community in the long term.

I even said we can record a first right of refusal to them if we were to ever um dispose of the asset. Am I planning on disposing of that asset? I don't know. But I didn't want that sitting out there as a worry something for them um or really uh for us. They want all the cards on the table. So um hypothetically before uh February we'll be looking at this. Um the nonprofit works here, too.

Uh because um one of the thought processes is is that they transfer the asset to us like all in one table, like one closing day. They would transfer the asset to us, process the conversion paperwork to for it to be under a Section 8 contract. Um and then um sign the Section 8 contract. We can't transfer our own asset to ourselves to administer, which I explained earlier. So that nonprofit function would serve even before we get to our own conversion with HUD converting these units.

I know that sounds really complex. And that's the way I understand it right now. I've run it past them a couple times, but I will bring to you a presentation and explanations like I did today of the complexities um if when we get there. But I wanted you to know um that that is [laughter] that's what's happening right now. That's what HUD is is doing and HUD is handling that conversion. Flying folks in from Chicago to do it. So Um very very very nice people.

Very helpful to us on us doing things in correct orders for submitting our application and make sure you don't miss this part and we're going to need this, etc. So, they've been they've been really helpful to us, too. So, any questions about that? Am I right we've been talking to them for a little over a year now, right? Has it been that long? It's It's actually crazily been because of voucher transfer. So, we started talking to them in May of oh oh no, May of 20 four.

So, they accomplished the voucher transfer in July of last year. Yeah, I remember. Yeah, and HUD has constantly said, "Don't forget about the public housing. Don't forget about the public housing." And I said, "We can't do that right now. There's no way." Um but I left the door cracked open. I said, "We're open to discussion, but I'm not making any commitments at all." And um they pushed that door open recently and said, "Let's chat." I was like, "Okay, let's figure it out.

Here are our conditions." And uh yeah, they're meeting them. So, yeah, it's it's kind of a different world within HUD on some of these things. So, we'll take it. In partnership with that community, their mayor and city manager have been really great to work with and I believe their mayor's term ends in December, which is one of the pushes to get this done. He would like to see that things are either complete or nearly complete um as he leaves office. That's good. Yeah.

They've been great to work with, but they did call after the HUD folks left and HUD folks talked HUD speak. Section 8, Section 8, Section 8 and called um all of them on speakerphone, the mayor, uh the admin person that serves the mayor and the city manager, so the true power and control, and the city manager called on speakerphone and said, um city manager was about ready to jump off the cliff. I was like, what is this? And is it all vouchers? And it's all leaving?

And I'm like, no, no, no, no, no. So, we talked it through. We talked it through and I said, next time you get close to the edge of the cliff, just call me. And and DD, their admin person, said, next time he gets close to the edge, I'm going to just push him and I'll call you. I was like, okay, that's fine, either way.

So, it's a great relationship we have with them where we can just talk about things naturally without a lot of formalities, um and being able to have those open, honest conversations is really helpful. So, I think those are my my big updates. Um I'm looking at the time, I think we'll leave it at that. Okay. Um general business, is is there any board member comments? Good luck to you, Moses. Thank you so much. Sure. Are you going to wear your green Are you going to wear your green sweatshirt?

No, I'll probably dress up a little bit. change. All right. Just to respect the the office and all of that. [laughter] I know, either way. Yeah. Um yeah, no, I mean, I will almost certainly dial in to the next meeting even if I am selected, just so I can say goodbye to everybody and thank everybody. Um but I don't want to do it right now cuz that seems exceptionally presumptuous, so um I will see you at the next meeting one way way Sounds great. Great. Thank you. Sounds good. Good luck.

And good luck, Lori, in your future endeavors. We appreciate you. Absolutely, Lori. Yeah, Lori, thank you so much. Awesome. I think that's it. Um we will consider the meeting adjourned. And we'll see you all in November. Great. Adjournment at 10:14. Thank you very much, everybody. I appreciate you. Thank you. Take care. Take care of your voice, Sarah. Thanks. Scout didn't know she was going to be talking so much. Obviously. Yeah, a lot of presenting. It's been fun, though.

I love to hear your presentations, so awesome. Thanks, everybody. Bye-bye. Mhm.