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HRA Meeting Minutes – Tuesday, November 16, 2010 Page 4 Member Masche advised that Mutual of Omaha Bank was very active in residential lending markets, and had a very detailed and strenuous process for reviewing requests, and if they rejected financing the project, it was a significant statement, based on the size of the loan request and its expensive impact for all parties. Member Masche noted that increasing association dues was part of the HIA legal compliance and the association’s due diligence in developing a financial plan to facilitate adequate reserve funds. Member Majerus suggested that a future HRA agenda provide for discussion on how much involvement the HRA desired as other potential requests came forward as more association’s became aware of this option and submitted requests; to ensure the HRA didn’t become proactive in encouraging use of an HIA. Ms. Kelsey noted that the request to the HRA, and recommendation to the City Council if approved by the HRA, initiated the process of developing the third party financial reports by the LJA, a proposed fee resolution; two (2) public hearings, one for creation of the ordinance and one to establish the fee; during which that due diligence and review by City staff could delay or halt the request. Member Pust noted that the make up of the City Council had not changed, and reminded HRA members and staff to take into consideration the political nature of the previous HIA request. Member Pust expressed her bias that when an HIA was used, it was paid off when the property was sold; and she was opposed to a private party benefitting financially from public funds. Member Masche addressed special assessments paid in a year versus allowing payment over time if an association assessed their own members. Ms. Kelsey noted that such a process couldn’t be done if bonds were issued, as it may result in a shortfall for repayment of those bonds, following the property or for a term of fifteen (15) years. Ms. Kelsey clarified that, if HRA funds were used and not a bond issue, the HRA could allow for early repayment. Member Pust opined that she would always want that as a policy. Chair Maschka noted the need to consider unintended consequences in the marketplace with the current market value or sales price of individual units in addition to a substantial assessment on top of that market value. Member Lee concurred, noting that they could already be overleveraged before adding the extra HIA burden. Member Pust noted that it was apparent that units were not selling well now. Member Elkins sought additional information on the demographics of current unit property owners. Marion Hewitt, Resident Homeowner of a unit at 3076 N Lexington Avenue As a long-term resident of the complex, Ms. Hewitt responded that the units were owned by a lot of young people at this time; with four elderly married owners and a total of seven to eight elderly-owned units; with all units currently occupied; and several younger people having children, but covenants restricting that as there was insufficient play area for them other than crossing Lexington Avenue to Lake Josephine Park, not a safe choice. At the request of Chair Maschka, Mr. Schumacher advised that of the total of twenty-three (23) units, two (2) of those were rental units, with the remainder owner-occupied. Mr. Schumacher advised that if the assessment was stipulated for pay off at sail, it would seriously impact resale