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Kathleen Mahany, member of the Housing and Human Concerns Committee, thanked Director Ponty for listening to her expertise on housing and sharing his expertise on financing. Ms. Mahany said she has worked in for-profit housing organizations and there is money in that business, and urged the Council not to worry about the default of those bonds. She expressed her concerns about who will monitor the 20% set aside units. Ms. Mahany said her experience on the HHCC with CDBG and HSF A funding requests has led her to understand that not all service groups are adequate to the task of monitoring complex programs. She asked that the set aside units be monitored by the City's Housing Coordinator Debbie Jones-Thomas who does an excellent job. Ms. Mahany said that the job training Mr. Litten referred to is mandated by State law. She asked if the residents in the 20% set aside units will only be required to pay 30% of their income. Ms. Mahany said the HHCC members sometimes feel like step children, and said she agreed with Ian Bain's comments. Mr. Litten said the manager of the facility will begin the monitoring process of the set aside units by screening the would be residents and examining their income tax returns to make sure they meet the income qualifications. He said at that point the City alone, although if it chooses it can delegate that function, but the City then examines the reports by the manager and certifies compliance. Mr. Litten said that the 20% requirement is established under Federal Law at 50% of median. He said there are no specific rent requirements under the regulatory agreement as proposed between the City and the borrower. Mr. Litten described additional fees that could be incurred. He said the market would determine the rents. In response to Council Member Hartnett's questions, Mr. Litten said the set aside requirement dictates that the people who qualifY must earn 50% of the median income, but there is no specific requirement in the regulatory agreement which governs the occupancy that the rent be set at a particular level. He said, "What will happen is, if those units are going empty because people can't afford them at the level set by the manager, the manager would have to lower those levels in order to have people occupy them." He confirmed that occupancy of the set aside units is based on income level and not their ability to pay a certain rent level or percentage of income. MIS: LEIPZIG/IRA TO TABLE THIS ITEM UNTIL SUCH TIME AS WE CAN GET SOME INPUT FROM THE HOUSING AND HUMAN CONCERNS COMMITTEE, STAFF, DEBBIE JONES-THOMAS, MIKE CHURCH AND ANSWERS TO SOME OF THE ADDITIONAL QUESTIONS THAT WERE RAISED TONIGHT INCLUDING GETTING COPIES OF THE FEASIBILITY STUDY, THE APPRAISAL AND SO FORTH Council Member Claire said that he and Vice Mayor Ruskin, members of the Council Investment Committee, worked with staff on this matter many months ago. He acknowledged that as former members of the HHCC he and Vice Mayor Ruskin considered the housing issues. He said, "I want to assure the HHCC that all of your concerns were in fact articulated during our meetings and we have not brought those REGULAR COUNCIL MEETING MINUTE BOOK NO. 56 FEBRUARY 9, 1998 MINUTES Page No. 272 PAGE 30