8/31/2017 FINANCE COMMITTEE Minutes

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4 Finance Committee Minutes August 3 1, 2017 Review&Action-Draft October 16; 2017 Annual Tovvm Meeting-Warrant (continued) Article 7 New Buy Down program. (continued) In reviewing the budget as proposed to purchase a$275,000 two-bedroom home,the down payment cost related to the CPA buy-down program is$155,000. The rental fee below market rate is $950. The mortgage is assumed a $675,the maintenance $150 and the MHA management fee is presumed at the rate of % or $76 per month. The sample projected budget realizes a savings of$49 per month. In considering this project it was noted the savings could fluctuate, and the entire maintenance fee; $150 and the savings projection of$49 could be retained. In ether considering this proposal with a projected savings of$199 per month, and the payment of the mortgage in full, it is possible the rental amount, 950 could also be available for use as an added savings. There was no outline with respect to the use of the savings, and the possible return of funds to the Community preservation Committee. Mrs. Botsford indicated the MHA is a profitable organization. Although it has not been fully determined, the excess funding could be used to subsidize the public state housing with building upgrades and maintenance. Funds would also build the reserves of the MHA and cover retirements as well as unforeseen expenditures. The Mashpee Mousing Authority was noted to have adequate staffing, a total of 7 employees to administer this program. Currently 170 its are being managed by the MHA. This includes private entities and housing in other towns. Mrs. Botsford was asked if there was any consideration to apply for a revenue band to obtain a favorable interest rate. In considering this option it was noted the MHA is not a town entity and may not qualify for a revenue bond since this is considered to be a small project. Mrs. Botsford stated if the project is successful and if the issuance of a revenue bond is financially feasible,this may be considered. If the project is worthwhile, it is the intent of the MHA to request additional CPA funding in the future-, If the proj ect is approved at Town Meeting it is hopeful that two hones would be purchased. Any remmmng money would be used as an additional down-payment for another affordable hone. Mrs. Botsford when asked of an exit strategy indicated the MHA would sell the home and return the funds to the Community preservation Committee. when asked if this program is an existing model, it was noted that other towns have done similar programs to accumulate affordable rental units. In.closing Mrs. Botsford was also asked if the Affordable Housing Conunittee has been involved in this process. In response it was mated the AHC was not advised of this particular project. Normally the entities try to work together,however the M14A is self-supportive to facilitate the process and to manage and create affordable housing.