6.3. HRSR 12-05-2022 - Laserfiche WebLink

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Meeting Summary – Preliminary (unapproved) Minutes of the Joint Finance Committee on November 29, 2022. The committee, along with financial advisor Mikaela Huot of Baker Tilly reviewed the proposal. There was discussion over current funding levels of the HRA, and that currently there isn’t a need to supplement the existing balances of the HRA by receiving loan repayment funds early. The committee discussed the discount rate of 9% and that it has a correlation relative to the present interest rate environment. However, the committee felt the rate is considerably high given the original terms of the loan agreement and its potential reduction of the principal balance. Ms. Huot suggested that in the event the borrower was seeking this adjustment to reinvest in the property, there may be more merit to considering the proposal. O’Neil indicated though, that the borrower had not indicated such an intent. A question was raised about whether receiving the payoff early mitigated the risk of a future default. Because of the existing mortgage on the property, the committee determined that to be a very small risk and would not justify a substantial discounting of the loan. The committee agreed that in some circumstances this proposal would make sense, but under the current circumstances it does not offer enough advantages. There was also discussion on whether to offer a modified proposal back to Metro Plains. The committee did not feel that offering a new proposal was necessary. However, the committee felt the committee and HRA should continue to be receptive to considering any early repayment offers and to communicate to Metro Plains the factors important in an early loan payoff. Motion by Ovall and seconded by Gromberg providing to the HRA a recommendation that any early settlement of the loan should not apply present value discounting to the $400,000 principal balance. Motion carried 6-0.