A SPECIAL MEETING OF THE BOARD OF COUNTY COMMISSIONERS

JANUARY 26, 1982

The Lake County Board of County Commissioners met in specia session on Tuesday, January 26, 1982, at 9:00 A.M. in the County Commissioners' Meeting Room, Tavares, Florida. Commissioners present were: James R. Carson, Jr., Chairman; Thomas J. Windram (arrived at 9:20 A.M.); Claude Smoak; C. A. "Lex" Deems; and Glenn C. Burhans. Others present were: James C. Watkins, Clerk; Christopher C. Ford, County Attorney; Sandra Stockwell, Assistant County Attorney; Michael C. Willett, Director of Development and Public Works; and Cathy B. Roy, Secretary.

The Chairman called the meeting to order stating the purpose of the special meeting was to consider adoption of an emergency Ordinance creating a Lake County Housing Finance Authority. Commr. Carson stated a letter from Governor Graham's Office setting a deadline of February 1, 1982, for creation of the authority had prompted a special meeting for consideration of the Ordinance. At this time the Chairman turned the floor to Commr. Smoak.

Commr. Smoak stated that a presentation would be made from the Orange County Housing Finance Authority. Commr. Smoak stated that the deadline from the Governor's Office for creation of the Housing Finance Authority was February 1, 1982, and the deadline for validation of bonds was set at May 1, 1982.

Commr. Smoak stated that meetings with Mr. Samuel Mazzotta, Executive Director of the Orange County Housing Finance Authority, Sandra Stockwell, County Attorney's Office, and Michael Willett, Director of Development and Public Works, had taken place in the past week to formulate the presentation to the Board concerning a Housing Finance Authority in Lake County.

Commr. Smoak stated that two revisions had been implemented in the proposed Ordinance previously presented to the Board. The first being oversight authority by the Board of County Commissioners in setting the parameters on how the authority will function but not in getting involved in the functions of the authority. The second revision was in giving the Board of County Commissioners the flexibility to operate with any other existing authority or to hire an agent to represent the Lake County Authority.

Commr. Smoak at this time turned the floor over to Mr. Samuel Mazzotta, Executive Director of the Orange County Housing Finance Authority, for his presentation.

Mr. Mazzotta stated that the Orange County Housing Finance Authority is a five member board that was appointed by the Orange County Board of County Commissioners. Mr. Mazzotta stated that prior to these appointments the Board of County Commissioners had been the Orange County Housing Finance Authority. Mr. Mazzotta stated that problems had occurred by the designation of the Board as the Housing Finance Authority and the autonomous Board was created. Mr. Mazzotta stated that the staff of the Orange County Housing Finance Authority consists of Executive Director, an administrative assistant and a secretary, housed in Orange County offices on West Orange Avenue, Orlando. The general counsel to the Housing Finance Authority is Swan and Haddock with Tom Lang being the representative.

Mr. Mazzotta stated that in the past several years Orange County has done one $130,000,000 single family bond issue, which came into the market place on May 12, 1981. On the first day of issue out of $108,000,000 in proceeds, $24,000,000 in mortgages were originated. Mr. Mazzotta stated that this bond issue is coming to an end and the last day for originating mortgages is February 4, 1982. Mr. Mazzotta stated that out of the $108,800,000 in bond proceeds, as of the 6th of January, 1982, 2,317 mortgages were originated. Mr. Mazzotta stated that the Housing Finance Authority has more than committed $18O,OOO,OOO of proceeds out of a $130,000,000 bond issue.

Mr. Mazzotta explained to the Board how the bond proceeds were distributed. Mr. Mazzotta explained that $130,000,000 in bonds were sold; $108,000,000 went into the loan proceeds account, which was the money to buy the mortgages from Savings & Loan Associations. Fifteen percent (15%) or roughly $16,000,000 to $17,000,000 was placed in a bond call account (bond reserve account); $1,200,000 was placed in a Section 8 Multi-Family Housing Account and $40,000 was placed in a low income housing development fund. The total bond sale resulted January 26, 1982 in the creation of five accounts. Mr. Mazzotta stated that the Orange County Housing Finance Authority is currently involved in a $150,000,000 Multi-Family Bond Issue and if the issue is successful will go to the market place sometime in the month of February. Mr. Mazzotta stated that this program differs from the Single Family Program in that the funding goes directly to the developer through the lender and in the Single Family Program the loans are made directly to the homeowners except in those instances where the developers buy lots to sell new construction homes. In addition to the $150,000 Multi-Family Bond Issue the Authority has also authorized the formulation for proceedings to do another Single Family Bond Issue; however, allocations from the Governor's Office have not been sent down and the size of the bond issue is not known. Mr. Mazzotta stated that the 1981 allocation was $600,000,000 state wide. Mr. Mazzotta stated that in addition to the Single Family Bond Issue the Authority has authorized preliminary investigation into doing an approximate $50,000,000 Single Family Home Improvement Loan Program in Orange County for rehabilitation and restoration of single family homes.

Mr. Mazzotta stated that Orange County had been approached by the Seminole County Board of County Commissioners and the authority has made a presentation to them on an Interlocal Agreement to administer the Seminole County program.

Mr. Mazzotta stated that in the Orange County Program there were twenty one (21) participating lenders who obligated themselves to utilize the $108,000,000 in proceeds that were generated out of the sale of the bonds. Those lenders paid a one point committment fee and committed for a portion of the $108,000,000. Mr. Mazzotta stated that the smallest committment was from a mortgage brokerage house which committed for $3,000,000 and the largest committment was another mortgage brokerage house in Orange County that committed for a total of $13,000,000. The lending institutions were then authorized to take fifty percent (50%) of their committment and sell their committment to developers of new construction housing. Mr. Mazzotta stated that this program worked very well in enabling buyers to be qualified under the 11-l/2% mortgate rate rather than the higher interest rates being charged in the commercial market place.

Mr. Mazzotta explained that a balance had to be maintained in the loans that were made in that single family program and the balance was imposed by the U.S. Treasury Department who said that if you are going to have a tax exempt status on the interest earned on the yield on these bonds, then you must then guarantee that the bonds in at least 60% of the instances will be government insured or guaranteed (FHA, VA or any other government insured programs), and 40% could be conventional loans between the lender and the borrower. They also imposed that there had to be a mortgage pool assigned for these loans and there had to be mortgage insurance on every loan made which was an add on cost to the cost of making the mortgage. The mortgage insurance was bid on the open market from mortgage pool insurers and MGIC was awarded the mortgage pool. In this program the Treasury Department also stated that the Housing Finance Authority could not administer the program; that someone in the market place converse and experienced in servicing the mortgages after they were made must administer this service. Mr. Mazzotta stated that this service was competitive bid.

Mr. Mazzotta explained that applicants had to meet income requirements established by the Orange County Housing Finance Authority. Mr. Mazzotta stated that the Housing Finance Authority also set limitations on the value of the homes to be purchased or constructed. Mr. Mazzotta explained that the above criteria was for one particular bond issue in Orange County and that Lake County can set entirely different criteria as established necessary by the Lake County Housing Finance Authority for each bond issue.

In answer to a question by Commr. Carson, Mr. Mazzotta explained that there is no connection between the ownership of the bonds and the life of the mortgage. Mr. Mazzotta stated the only connection January 26, 1982 being that the Housing Finance Authority is obligated within the first five years of origination of the mortgage to protect the tax exempt status in that the applicant has to sign an intent to occupy the home the first five years and that if it was FHA or VA insured or guaranteed, that the rules of the particular program then applied and whoever assumed the mortgage had to meet the same qualifications. In the case of conventional mortgages those individuals are restricted against giving the benefit of the 11-l/2% lower interest mortgage to anyone who does not qualify.

Mr. Mazzotta stated that no foreclosures had been made at this time and there was only one within the ninety (90) day default period. Mr. Mazzotta stated that they have a 1.35% total that are thirty (30) or more days delinquent.

At this time Mr. Mazzotta distributed a hand out sheet containing the Orange County Housing Finance Authority qualifications based on 17-l/2% interest on FHA, VA and Conventional loans and 18% interest on FHA 245 Plan III loans.

Commr. Carson questioned whether or not the Orange County program was restricted to newly constructed homes. Mr. Mazzotta stated that the program was not limited to newly constructed homes and that they permitted the lenders to sell 50% of their committments to new home developers and stated that 47% of all the mortgages that have been looked at so far were new construction, less than half. Mr. Mazzotta stated that Lake County could set up the limitations concerning new construction as they deemed necessary.

Mr. Mazzotta stated that the proposed agreement with Seminole County is a joint bond issue with Orange County to meet housing needs. Mr. Mazzotta stated that the Authority recommended that this agreement be on an issue by issue basis.

Mr. Mazzotta stated that he would now answer any questions the Board might have.

Commr. Windram asked Mr. Mazzotta what requirements were necessary to determine the allocations to the lending instituions. Mr. Mazzotta explained that the committments from the lending institutions were made prior to the bond issue.

Mr. Mazzotta explained to the Board the process of State allocations in regard to Housing Finance Authorities in the State of Florida.

Commr . Smoak explained to the Board that the committments from the area financial institutions must be received prior to issuance of bonds.

Commr. Deems questioned the result of the conventional interest rates dropping below the rates designated on the bond issue. Mr. Mazzotta explained that the risk to the bond buyers was relatively low and the buyers are informed of all of the risks involved in purchasing these bonds. Mr. Mazzotta explained that the situation explained by Commr. Deems would have to occur in a very short period of time.

Chris Ford, County Attorney, questioned how the bonds are paid off in twelve years with an amortization on the mortgages of thirty years. Mr. Mazzotta stated that the proceeds on the earnings off of the mortgages pay back the proceeds to the bond holders and you get to a balloon situation in twelve years wherein the mortgages will have to be traded as is the situation with lending institutions today holding 8% mortgages that are seasoned by trading and selling them.

Mr. Mazzotta explained that the Orange County Housing Finance Authority could be beneficial to Lake County through an interlocal agreement in that Orange County has been involved in the process over the last couple years and could cut down the time involved in the competitive bidding processes. Mr. Mazzotta also explained that meeting the requirements of the bond council needed experience and that the Orange County Housing Finance Authority's experience in twice meeting these requirements would be invaluable to Lake County.

Commr. Smoak asked whether the Orange County Housing Finance Authority was in a posture that they anticipate participating in a Single-Family Bond Issue and if the Orange County Housing Finance Authority could get the validation process through the necessary requirements as of May 1, 1982. Commr. Smoak also questioned whether or not Orange and Lake Counties could participate in such a bond issue this calendar year. Mr. Mazzotta stated that the Orange County Housing Finance Authority January 26, 1982 had expressed interest as a result of the Seminole County situation, in aiding and assisting any of the surrounding counties by virtue of experience. Mr. Mazzotta explained that at the Housing Finance Authority Meeting to be held Friday, January 29, he would acquaint the authority with this meeting in order that they could give Lake County an answer in writing, by Resolution, as to their interest.

Commr. Burhans questioned where payment to the Orange County Housing Finance Authority would come from should Lake County enter into an interlocal agreement with them. Mr. Mazzotta stated that any administrative costs would come out of the proceeds from the bond issue. Mr. Mazzotta also stated that if no bonds were sold the Housing Finance Authority would request payment of their administrative costs.

Commr. Smoak recommended that the Board of County Commissioners appoint themselves as the interim authority until an inter-local agreement is worked out with the Orange County Housing Finance Authority. Sandra Stockwell recommended that the Board of County Commissioners be the interim authority until the terms of an interlocal agreement are worked out and that the interlocal agreement would appoint the Orange County Housing Finance Authority as the Lake County Housing Finance Authority on an issue by issue basis.

Commr. Carson thanked Mr. Mazzotta for the fine presentation and asked if anyone in the audience wished to address the Board at this time.

Mr. Richard Honeycutt, Sun Bank, Orlando, Florida, addressed the Board and recommended that Lake County form an ad hoc committee with representatives of area lending institutions as one of the first steps in order to establish the interest of the lending institutions in participating in the program and to assist in setting the parameters for the bond programs in the terms of community needs.

Mr. Honeycutt explained some of the areas that needed to be addressed concerning the lending institutions in the formulation of the Housing Finance Authority.

Commr . Smoak stated that he hoped that Lake County could benefit from the experience of not only the Orange County Housing Finance Authority but the lending institutions in formulation of the Lake County Housing Finance Authority. Commr . Smoak stated that the Board was aware that cooperation was essential with the area lending institutions to gain the support and committment from these financial institutions.

Mr. Mazzotta suggested to the Board that the ad hoc committee be established representing the area lending institutions and also suggested that no lenders be appointed to the Housing Finance Authority due to a possible conflict of interest.

Mr. Watkins questioned who appointed the committee for representation from the lending institutions. Mr. Honeycutt stated the the Housing Finance Authority made the appointments to the committee.

Mr. Chuck Welsh was present from the Homebuilders Association in order that he could report to the Association the actions of the Board.

Commr. Smoak stated that Mike Conley, Vice President of the Exchange Bank of Clermont was present.

Commr. Smoak made a motion, seconded by Commr. Windram, that the Ordinance to create a Housing Finance Authority in Lake County be placed on the floor for its first and final reading.

Chris Ford stated that prior to placing the Ordinance on the floor, the Board had to vote to bring the Ordinance on the floor on an emergency basis. Commr. Smoak withdrew his motion and Commr. Windram withdrew his second.

On a motion by Commr. Smoak, seconded by Commr. Deems and carried unanimously, the Board declared an emergency due to the deadlines set by Governor Graham in order to consider adoption of the proposed Ordinance creating the Housing Finance Authority of Lake County January 26, 1982

On a motion by Commr. Smoak, seconded by Commr. Windram and carried unanimously, the Board placed the Ordinance on the floor for its first and final reading by title only:

AN EMERGENCY ORDINANCE CREATING THE HOUSING FINANCE

AUTHORITY OF LAKE COUNTY, FLORIDA; PROVIDING FOR APPOINTMENT AND REMOVAL OF ITS MEMBERS: PROVIDING FOR DISCLOSURE OF CONFLICTS OF INTEREST; PROHIBITING THE EXERCISE OF EMINENT DOMAIN BY THE AUTHORITY; PROVIDING FOR THE ISSUANCE OF REVENUE BONDS; PROVIDING REMEDIES FOR OBLIGEES OF THE AUTHORITY; LIMITING THE LIABILITIES OF THE AUTHORITY; EXEMPTING BONDS FROM TAXATION; PROVIDING AN EFFECTIVE DATE; PROVIDING A SEVERABILITY CLAUSE.

On a motion by Commr. Deems, seconded by Commr. Burhans and carried unanimously, the Board approved adoption of the said Ordinance, Number 1982-4, as read by title only, on its first and final reading.

On a motion by Commr. Smoak, seconded by Commr. Deems and carried unanimously, the Board directed the Clerk to correspond with Mr. Mazzotta stating Lake County's interest in participation with Orange County in their Housing Finance Authority. The Board also directed that a copy of the Ordinance adopted this date be forwarded to the Orange County Housing Finance Authority.

The Board requested that the Chairman be given the authority to pursue the creation of an ad hoc committee representing the lending institutions in Lake County. Mr. John Clark, Sun Bank, Leesburg, stated that he would forward to Mr. Carson a list of potential lenders in Lake County who are engaged in real estate lending.

COMMITTEES

Discussion occurred regarding the selection of members to the Lake County Mobile Home Advisory Board. Commr. Smoak requested that the selection process be postponed due to the fact that he would not be able to be present for the February 2, 1982, meeting.

The Board directed the Clerk to notify all of the applicants of the postponment of the selection until February 16, 1982, and request that they report to the Board of County Commissioners Office in order that they may be called individually into the meeting room.

On a motion by Commr. Windram, seconded by Commr. Burhans and carried unanimously, the Board approved to contract with Mrs. Dorothy Monroe, Dietitian for the Nursing Home, to certify the menu for the Lake County Jail two to three times annually at an hourly rate of $20.00.

EMERGENCY MEDICAL SERVICES

On a motion by Commr. Burhans, seconded by Commr. Deems and carried unanimously, the Board approved to designate Dr. Thomas Langley as an emergency medical services personnel, thereby designating his vehicle as an emergency medical services vehicle.

CONTRACTS, LEASES & AGREEMENTS/JAILS

On a motion by Commr. Burhans, seconded by Commr. Deems and carried unanimously, the Board authorized the Chairman to initial a $1,000 reduction in the contract with Audio Systems of Florida, Inc., for installation of a fire alarm system in the Lake County Jail, with the reduction being in the amount of the Performance Bond.

ACCOUNTS ALLOWED/PUBLIC WORKS/ATTORNEYS

On a motion by Commr. Burhans, seconded by Commr. Deems and carried unanimously, the Board approved the request of Sandra Stockwell and Michael C. Willett to attend the Orange County Housing Finance Authority Meeting scheduled for Friday, January 29, 1982, in Orlando, Florida, at a cost not yet determined.

There being no further business to be brought before the Board, the meeting adjourned at 11:20 A.M..

JAMES R. CARSON, JR.. CHAIRMAN

JAMES C. WATKINS, CLERK

CBR/1/27/82