HomeMy WebLinkAbout1997-09-08 City Council (34)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:
AGENDA DATE:
SUBJECT:
CITY MANAGER DEPARTMENT: Planning and
Community Environment
September 8, 1997 CMR:367:97
FIRST AMENDMENT TO AGREEMENT FOR FUNDING OF
THE DEVELOPMENT OF THE LYTTON COURTYARD
SENIOR HOUSING PROJECT
Council is requested to approve Amendment Number One to the May 17, 1993 agreement
with Lytton IV Housing Corporation (Lytton) and Commtmity Housing, Inc. (CI-II) for the
development of the Lytton Courtyard (formerly Lytton IV) senior housing project at 330
Everett Street, Palo Alto, in order to revise and .clarify the eligible uses for the remaining
$96,707 in unexpended funds to allow $51,607 for CHI’s staff costs and $45,100 for
physical improvements to the project and to add a deadline for the completion of these
improvements and the expendituxe of funds. ,
RE MME
Staff recommends that the Council:
1)Approve the attached Amendment Number One to the Agreement to amend the ’
project budget, revise and clarify the eligible uses of City funds and add a June 30,
1998 deadline for the completion of physical improvements and expenditure of the
remaining $96,707 contract balance.
Authorize the Mayor to execute Amendment Number One to the Agreement in
substantially s’m~ar form, and direct the City Manager to administer the provisions
of the Agreement, as amended.
POLICY IMPLICATIONS
This report does not represent any change to existing City policies.
CMR:367:97 Page 1 of 5 ’
BACKGROUND
On May 17, 1993, Council approved an agreement with Lytton and CHI to provide a loan
of $386,250 in Commercial Housing In-Lieu funds for development costs of the 51-unit
Lytton Courtyard senior housing project that were not covered by other sources of funds.
The $386,250 was the amount requested by CHI. Its estimate of the needed amount of City
funding was based on a tentative budget of $6,239,150 and the following sources of funding:
$5,450,900
$100,000
$202,00O
$100,000
$6,239,150
HUD’s preliminary funding commitment of Section 202 funds
Grant from Palo Alto Housing Corporation
CHI’s Capital Fund
City of Palo Alto CDBG Grant
City of Palo Alto Housing Reserve Loan
TOTAL ESTIMATED SOURCES OF FUNDS AS OF 5/93
Because the May 1993 budget was preliminary, CHI requested that the total loan from the
City’s Housing Revenue Fund be for up to $500,000, with the amount over $386,250
available With the City Manager;s approval. As of the" December 3, 1993 start of
construction, the City approved disbursements totaling $403,293 to CHI. The project was -
completed, the building opened and the units were fully occupied by June of 1995.
In late 1995 and early 1996, staff requested a final cost accounting and billing, as required
under the agreement. In May 1996, CHI presented staffwith the final audited development
costs, together with a billing of $96,707 in City fimds to be spent as follows:
$43,707
$23,000
$30,000
Improvements to the project for residents comfort & security
Payment of staff time to open project & implement affirmatiVe marketing
plan
Additional payment to housing consultant (over the $50,000 in the HUD
approved budget)
$96,707 TOTAL ADDITIONAL CITY FUNDING REQUESTED
Staff referred CHI’s request to the City Attorney, due to the lack of clarity in the original
agreement language. The City Attorney advised against using City funds for additional
payments to the housing consultant. He advised that the City Manager could approve the
$23,000 for the affirmative marketing plan, because that was a HUD-required task, and also
the $43,707 in additional physical improvements, based on the agreement language giving
the City Manager authority to approve funding requests from CHI over the initial $386,250.
Based on this advice, staff, in a letter dated July 25, 1996, informed CHI of the City’s
agreement to pay a maximum of $66,707 (the $23,000 for staff costs and the $43,707 for the
improvements) of its request. The $30,000 for the additional fee for the housing consultant
was denied.
CMR:367:97 Page 2 of 5
DISCUSSION
Stag has ’ spent the last year working with CHI to obtain proper documentation of the claim
for affn’mative marketing staff costs and to secure the completion of the additional $43,707
in improvements. Only recently has CHI hired an architect to design and plan the physical
improvements. The City’s July 25, 1996 letter stressed that reimbursement would be made
for the $23,000 in CHI staff costs for the afftrmative marketing plan only after "appropriate
documentation and justification of the actual staff hours and costs" was submitted.
However, in a letter dated May 28, 1997, Mr. Schaffran (CHI’s consultant) states "the
$23,000 requested for salary reimbursement in prior funding submittals was merely the
balance remaining in the $96,707 after deducting $73,707 for the other items." Mr.
Schagran’s letter went on to present an acceptably reconstructed analysis of staff time spent
on the project’s affLrmative marketing and rent-up activities totaling $105,231. CHI
therefore requested disbursement of the fi~ $96,707 contract balance based on the
reconstruction of its staff hours for the affirmative marketing program. Staff does not find
this acceptable for two reasons. First, statfbelieves that completion of the proposed physical
improvements is important for the elderly residents’ comfort and safety and that priority for
use of City funds is consistent with the original intent of the loan agreement. Second, the
$105,231 in CHI staff costs includes all hours devoted to any and all aspects of the
development of Lytton Courtyard, while the City previously approved only the staff costs
directly connected to the affmnative marketing program, rent-up, tenant selection and
opening. Staff believes that stttiicient evidence exists to recommend payment of $51,607 for
the marketing, rent-up and opening, which then leaves sufficient funds for CHI to complete
the physical improvements.
Consequently, the proposed Amendment revises and clarifies the description of uses for the
$500,000 loan t~om the City Commercial Housing In-Lieu Funds, including the unexpended
$96,707, to clearly permit the unexpended funds to be used as follows:
1)$51,607 for retroactive reimbursement of CI-~’s estimated direct staff costs
(salary and benefits) incurred during 1994-1995 for conducting an atYmnative
marketing and outreach program for project rent-up, and
2)Up to $45,100 to be used for actual, hard construction costs of the following
improvements to be installed in the completed Lytton Courtyard project:
1. Air Conditioning System for
Community Room $20,000
2.- Storage Lockers:$16,600
3. Screen Doors:$7,000
4. Security Gate & Fence:~
TOTAL $45,100
CMR:367:97 Page 3 of 5
The Amendment adds a June 30, 1998 deadline for the completion of the above four
improvements and the submittal of acceptable documentation to the City. ff all the work is
not completed and costs properly documented and billed to the City by the deadline, no
further contract payments will be made. After June 30, 1998, all unexpended funds will be
returned to the Commercial Housing In-Lieu Fund and made available for other housing
developments. Should final costs for one item be less than the above estimates, the
Amendment allows the excess funds to be applied to the other listed improvements, but no
new, additional improvements will be eligible for funding. If the total, final costs for all four
improvements are less than $45,100, the excess will revert to the City’s Commercial Housing
In-Lieu fund, and the $500,000 balance on CHI’s note executed November 30, 1993 will be
reduced by acorresponding amount. If the total, final costs for the four improvements
exceed $45,100, CHI is fully responsible for payment of the excess costs. Amending the
agreement should settle the difference in interpretation of.the agreement’s provisions
between staff and CHI, and encourage CHI to proceed in a timely fashion with the
completion of the improvements for the benefit of the Lytton Courtyard residents.
_ALTERNATIVES
There are three basic alternatives to the staff recommendation:
1)Reimburse CHI the entire $96,707 contract balance for staff costs based on the
documentation in Mr. Schaffran’s letter, or
Maintain the City’s position stated in the July 25, 1996 City staff letter which allowed
no more than $66,707 in expenditures ($23,000 for staff costs and $43,707 for
improvements to the building), or
3) . Deny any additional expenditures based on the clause in the agreement reserving the
right to disallow any costs not approved in advance.
FISCAL IMPACT
No additional City funds are required due to this amendment.
ENVIRONMENTA~
Anegative declaration under the California Environmental Quality Act (CEQA) was adopted
by Council on September 23, 1991, at the time of the planned community zone adoption for
the Lytton Courtyard project.
P~.~a~$_F_O_~I~WIN G APPROVAL
Following execution of the Amendment, staff will issue a $51,607 payment to CHI for
reimbursement of staff expenses for the marketing, rent-up and opening Costs, based on the
documentation submitted on behalf of CI-II with the May 28, 1997 letter from Mr. Sehaffran.
Staffwill reimburse CI-I[ for the cost of the physical improvements described in the revised
budget upon completion of each part of the actual construction work. All work must be
CMR:367:97 Page 4 of 5
complete and a payment request, together with acceptable documentation, submitted to the
City by June 30, 1998 or the unexpended funds will be reappropriated to the Commercial
Housing In-Lieu funds for other housing activities.
ATTACHMENTS
1. Amendment Number One to Agreement For Funding of Site Acquisition and
Development For the Lytton IV Senior Housing Project
Letter dated May 28, 1997 from E. Morton Schaffran "Re: Requisition for Unfunded
Balance in the Lytton IV Residual Receipts Note" (without attachments)
Letter dated July 30, 1997 from A. W. Sandy Barker, Architect, "Re: Budget Review,
Balance of Financing for Lytton Gardens IV"
PREPARED BY: Catherine Siegel, Housing Coordinator
DEPARTMENT HEAD REVIEW:
Director of Planning and
Community Environment
CITY MANAGER APPROVAL:
Manager
CC:Lytton IV Housing Corporation
Community Housing, Inc.
E. Morton Schaffran, 700 Hancock Way, El Cerrito, CA. 94530
CDBG Citizens Advisory Committee
CMR:367:97 Page 5 of 5
ATTACHMENT 1
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
City of Palo Alto
Office of City Attorney
250 Hamilton Avenue
Palo Alto, CA 94301
Recorded without charge.
Govt. Code sections 6103
and 27383
SPACE ABOVE THIS LINE FOR RECORDER’SUSE
AMENDMENT NO. ONE TO AGREEMENT NO. C3044299
BETWEEN THE CITY OF PALO ALTO AND
LYTTON IV HOUSING CORPORATION AND COMMUNITY HOUSING,- INC~
FOR FUNDING OF SITE ACQUISITION AND DEVELOPMENT
FOR THE LYTTON IV SENIOR HOUSING PROJECT
This Amendment No. One to Agreement No. C3044299 is
entered into , by and among the CITY OF PALO ALTO,
a chartered city and a municipal corporation of the State of
California ("CITY"), and LYTTON IV HOUSING CORPORATION, a
California nonprofit corporation and COMMUNITY HOUSING, INC., a
California nonprofit corporation, both located at 655 Lytton
Avenue, Palo Alto, CA 94301 ("CHI").
RECITALS:
WHEREAS, on May 17, 1993, the Agreement was entered into
by and among the.parties in order that the CITY,may provide funding
to CHI to defray a portion of the site acquisition and development
expenses associated with the development of a 51-unit low income
senior rental housing complex at 330 Everett Avenue, Palo Alto; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, in consideration Of the covenants, terms,
conditions, and provisions of this Amendment, the parties agree:
SECTION i.
to read as follows:
Paragraph C is hereby amended in its entirety
"C.PROJECT COSTS AND FINANCING
The total cost of the Project is estimated tO be $6,239,150,
including pre-development and construction, site acquisition,
working capital, off-site improvements, demolition, ’relocation and
the funding of required maintenance reserves. Projected sources of
funds are:
970811 ~ 0071259
HUD 202 Advance
Funds from CHI
Grant From Palo Alto
Housing Corporation
City of Palo Alto:
CDBG Funds:
Commercial Housing
Reserve:
$5,450,900
202,000
I00,000
100,000 (Pursuant to
agreement with CHI)
386,250 (Current estimated
need)
TOTAL SOURCES OF FUNDS $6,239,150
CITY agrees to loan to CONTRACTOR the sum of Three Hundred Eighty-
six Thousand Two Hundred Fifty and No/100 Dollars ($386,250) for
the Project. In addition, CITY agrees to loan such amount in
excess of $386,250, up to a maximum of Five Hundred Thousand and
No/100 Dollars ($500,000), to pay for additional Project costs,
over-the estimated $6,239,150, which are reasonable and necessary
for the Completion of the Project based upon HUD and/or CITY
requirements, and which could not have been foreseen or avoided by
CONTRACTOR. Such costs may include, but shall not necessarily be
limited to, up to a maximum of $51,607 in salaries and employee
benefits actually incurred between May I, 1994 and April 30, 1995
in connection with CONTRACTOR’s affirmative marketing and outreach
program to establish a waiting list for occupancy in the Project,
review and certify applicants and select the first residents in
conformance with HUD policies and~procedures, additional relocation
expenses, hard construction costs.in excess of current estimates,
additional reserves required by HUD and increases in construction
bids resulting from HUD processing delays. The term "hard
construction costs" shaIl include a maximum of $45,100 in costs for
the following improvements to be installed after the occupancy of
the Project: screen doors ($7,000), storage lockers ($16,600), a
security gate and fence ($1,500) and an air conditioning unit for
the Project’s community room ($20,000). No other post-occupancy
improvements costs are eligible for reimbursement by the CITY.
CITY’s City Manager shall have the authority to approve all
requests from CONTRACTOR for funds in excess of $386,250.00, up to
the $500,000 maximum. CONTRACTOR shall fully document the amount
and reason for any requests for additional CITY contributions, to
~he satisfaction of the City Manager."
SECTION 2. Paragraph F is hereby amended in its entirety
to read as follows:
"Fo DISBURSEMENT OF FUIqDS;TITLE INSURANCE
The loan proceeds shall be funded through an escrow with 01d
Republic Title Company, 1900 The Alameda, San Jose, CA. 95126,
Escrow Number 366439oHJJ. The parties to this Agreement shall
place all funds and documents, together with appropriate escrow
instructions, into the escrow in order to fulfill the terms of this
Agreement.
970811 syn 0071259
2
The funds loaned to CONTRACTOR in accordance with Section C of this
Agreement shall be disbursed to CONTRACTOR as follows: Upon
written request to the City Manager, the City shall reimburse
CONTRACTOR for expenses incurred by CONTRACTOR and authorized
under Paragraph C herein. With each payment request, CONTRACTOR
shall certify in writing that the services have been satisfactorily
performed and that the expenses for which reimbursement .is
requested are reasonable and necessary in accordance with Section
C. Reimbursement of post-occupancy ’construction costs, as defined
in Paragraph C herein, shall be made by the CITY, provided that the
improvements for which reimbursement is expressly contemplated
herein are fully completed and a claim for reimbursement of costs
with supporting documentation acceptable to the CITY is submitted
to the CITY on or before June 30, 1998. The City Manager reserves
the right to disallow any cost not approved in advance. With
respect to funds allocated for improvements described in Section C
which are not constructed and for which supporting documents are
not submitted on or before June 30, 1998, the City Manager will
allocate such unexpended funds to the CITY’s Commercial Housing In-
lieu Fund at any time after June 30, 1998.
At the close of the HUD 202 Advance escrow, CONTRACTOR, at its own
cost and expense, shall secure the issuance of a CLTA policy of
title insurance, in the amount of the loan evidenced by the Note,
clear of any title defects that would prevent the construction and
operation of the Project."
SECTION 3. Except as herein modified, all other
provisions of the Agreement, including any exhibits and subsequent
amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly
authorized representatives executed this Amendment on the date
first above written.
ATTEST:CITY OF PALO ALTO
City Clerk Mayor
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED:
City Manager
Director of Planning and
Community Environment
LYTTON IV~OUSING__. CORPORATION
By:
Its:
970811 mfn 0071259
Acting Director of
Administrative Services
Risk Manager~
970811 syn 0071259
4
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
On .~:.~ r m7 ~qq ~, before me, the undersigned, a
notary public in and for said County, personally appeared
personally known to me (.er---pr~ved--~o~me~on~e---b~
sa-t~i-sfac~r~--evidenc~) to be the person(~ whose name(~ is/ar~
subscribed to the within instrument, and acknowledged to me that
he/she/t4~=y executed the same in h-~s/her/t-~ei~ authorized
capacity(~es), and that by Ai~/her/t~ signature(~) on the
instrumen~ the person(~, or the entity upon behalf of which the
person(~ acted., executed the instrument.
WITNESS my hand and official seal.
970811 syn 0071259
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF ),)
COUNTY OF )
On ., before me, the undersigned, a
notary public in and for said County, personally appeared
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that
he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrumen~ the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
970811 t~yn 0071259
E.M. SCHAFFRAN AND CO.
ATTACHMENT 2
May 28, 1997
Ms. June Fleming
City Manager
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
Re: Requisition for Unfunded Balance in the Lytton IV Residual Receipts Note
Dear Ms. Fleming:
By virtue of special knowledge gathered as Housing Consultaht during Lytton IV
development, 1 was asked by Community Housing, Inc., to submit this new requisition on
their behalf, for the remaining $96,707 in the $500,000 ResiduaLReceipts Note. This
request substantiates payment of the Note’s face value, pursuant to the following clause in
the Funding Agreement between the City of Palo Alto, Lytton W Housing Corporation,
and Community Housing, Inc.:
"City agrees...to pay for additional Project costs...which are reasonable
and necessary for the completion of the Project based upon HUD
and/or CITY requirements, and which could not have been foreseen
or avoided by CONTRACTOR:"
An arbitrary edict by Planning and Community Environment in a 7/25/96 letter to CEO
Vera Goupille contravenes this contractual obligation..The letter’s refusal to pay for any
costs, other than the $66,707 approved in that letter, wolfld strip CHI of its right to another
$30,000 under the Funding Agreement. Therefore, we respectfully request that the
unfounded ukase in the 7/25/96 letter be set aside in the processing of this requisition.
Documentation presented herein shows that well over $161,000 was spent in
reimbursement-type costs. This requisition is organized as h~llows:
CH! Achievements
CH! Saved The City $900,000 on Lytton I~V
The Developer Fee
Reimbursable Staff Time
Staff.Time Substantiation
Reimbursable Hard Costs
Payment Request
i - CH| Achievements
First, this retrospective on the CHI record, which deserves greater recognition.
Since the early seventies, when The First Methodist Church and The First
Presbyterian Church ioined hands to form Community Housing, Inc.,--a nonprofit
public benefit corporation--CHI Board members have worked tirelessly and. selflessly
to create affordable housing and long-term,health care for the Palo Alto community.
The three inter-connected proiects on a single block in central Palo Alto is probably
unique in the country for delivering to very low income seniors a combination of
independent living, assisted living, and skilled nursingmsimilar to a continuing care
retirement community in the ascending levels, but vastly different in incomes
served.
True .to its mission, the Board produced yet another project for very low income
seniors, fighting an uphill struggle along the way. Lytton IV was pursued with vigor
and determination, successfully overcoming neighborhood opposition and other
rnaior hurdles.
A resourceful, vigorous Affirmative Fair Housing Marketing Program produ.ced an
occupancy mix in which 86% of the households were below 30% of median income
and one-third of the persons were non-white. Whereas the very-low income
admission limits were $22,450 and $25,700 respectively for singles and couples, the
median incomes at Lytton IV were $7,200 and $11,640 respectively. This achievement
enabled the City to use Lytton W as the linchpin in its CHAS performance reports.
City staffers take pleasure in escorting visi.ting planners to the Lytton IV site, to savor
its architectural fit wi,th the n.eighborhood.
I!. CHI Saved The City $900,000 on Lytton
City Council committed ,$1.4 million in Housing Reserve funds to Lytton IV. Subsequent
Conditional Commitment and Firm Commitment Applications to HUD succeeded in
obtaining a Capital Advance from HUD that exceeded the initial Fund Reservation b~
81%. The $5,738,600 in the Firm Commitment was a rise of $2,560,400 over the original
$3,178,200.
The increase in HUD money triggered a slice of $900,000 from the $1,400,000 commitment,
a cut of almost two-thirds. The $900,000 was then re-allocated to other jobs. It is
noteworthy that the additional $30K in this requisition is only 31/3% of the $900,000 that
CHI saved the City.
Staff acknowledges that with an investment of only $600,(~3---$500K in Housing Reserve
plus $100K in CDBG funds--the per-unit outlay by the City is substantially below that in
other affordable housing projects.
Iil- -rhe Developer Fee
A Developer’s Fee, written into HUD processing of Section 202 projects, is now a fixture in
total replacement cost. The Housing Reserve investment in Lytton IV would have risen
far above $500,000 if this fee had been introduced in time for Lytton W.
After decades of.Section 202 administration, HUD experienced a revelation that (1) monu-
mental time and expense on the sponsor’s part are required for successful 202
development, and (2) the Housing Consultant is, underpaid. The product of that
illumination is a Developer’s Fee.
After studying requested data from Sponsors and Consultants on their duties, time, and
expense, HUD came out with an 11/26/96 Notice that introduced the Developer’s Fee--at
8% of Replacement Cost. Finally, sponsors can be fairly reimbursed, and Consultants can
be compensated commensurately with job demands.
Under this new standard, the Developer’.s Fee for Lytton lV would have been $300,000.
The following table shows how this amount was calculated:
8% of Total Replacement
Cost with a maximum of
$400,000 plus 2% of
any replacement cost
I amount over
55,000,000.
Replacement Cost in HUD
Firm Commitment
Less
Contingency Allowance
Housing Consultant
Organizational Expanse
Net Replacement Cost
Developer’s Fee
Base Amount
2% of Repl Cost Over $5M
Total
Allocation of Developer’s Fee
Contingency Allowance
Sponsor and Consultant
New Total Replacement Cost
$6,073,576
-117,972
-50,000
-1,000
5,904,604
400,000
18,092
418,092
117,972
300,120
418,092
$6,322,696
HUD’s payment of the Developer’s Fee from the Section 202 Capital Advance will noi
require time cards or special documentation. The Developer’s Fee will be payable upon
request, in the same manner as the fee for architect, builder, or attorney.
IV- Reimbursable Staff "rime
The $23,000 requested for salary reimbursement in prior funding submittals was merely
the balance remaining in the $96,707 after deducting $73,707 for the other items. However,
$23,000 is only a fraction of salary costs eligible for reimbursement.
3
The roster of reimbursable staff time that was not reflected in previous requisitions is
shown below. This requisition includes time devoted to these essential activities.
1- Affirmative Fair. Housing Marketing Program
2- Tenant Selection
3-Procurement of Furniture, Furnishings and Equipment
4-Preparation of reports for the Board, and attendance at Board Meetings
5-Preparation of the initial Operating Budget and getting HUD approval
6-Arranging’for secudty of the building ,
7-Attending job site meetings
8-Devising policies and programs for the project operation
9-Attending HUD training meetings
10- Selecting the staff for the project
11- Preparing the punchlist
12- Preparing Disbursement Requests to HUD and paying/dealing with vendors
13- Supervising the above activities
The following table shows over $105,000 in staff time approvable under the terms of the
Funding Agreement. The gross salaries shown in the final column were furnished by
Glennon T. Moran, Chief Financial Officer for CHI. Each line item, other than that for
Robert Rowe, deceased, is supported by explanatory exhibits. Attached statements from
Cheri Jackson, Jan Fliegel, Vera Goupille, Anees Azad, and Jonathan Wilson contain
descriptions of their Lytton IV duties and statements on time consumed. We cannot
present time cards, or lists of meetings, memos, telephone calls, etc. Staff did not use a
stop-watch to record time spent on different projects, but their responsible judgments of
time consumed in essential Lytton IV activities should be respected, particularly since
their statements detail the nature of that duty.
Employee
IJackson, Cheri
Fliegel. Jan
Goupille. Vera
Rowe, Robert .
Azad, Anees
Pinn, Lynda
Wilson~ Jonathan
Periodof Time
65%
75%
15%
22%
20%
7.5%
20%
511/94 to 4130/95
:5/1194 to 4130/95
19Ill94 to 4/30195
1911194 to 3/31195
2195 to 4/30/95
911194 to 4130/95
mid-Feb to 4/30195
Total
Gross Salary
$41,042
27,470
..18,327
9~654
4,920
2~462
1 ~656
$105,231
The above listing does not include all staff time required for Lytton IV. Some-past and
present employees are not represented above. Further, the 9/1/94 start date for Goupille,
Pinn, and Rowe constrains the reimbursable period for those employees, since they
performed essential work before 9/1/94. If the full year ending 4/30/95 were used for
Goupille and Pinn the above total would be increased by over $10,000. However,. the
9/1/94 start is used here, since (a) that was the start in prior submittals to the City, and (b)
the inclusion of Pre:9/l/94 activity would be academic, since the $105,231 for the
proscribed period already exceeds the $96,707 balance in the Funding Agreement.
A closing date of 4/30/95 is used in the periods shown above, because the Project Rental
Assistance Contract was dated 5/1/95. Therefore, prior to 5/1/95 the salary expenses
shown herein had to be borne by the Sponsor as part of the development of the project. ’
The gross salary figures include 23% of salary for the benefits listed on the attached
breakdown from Glennon Moran, CFO. Actually, as shown, benefits exceed 24%. The
23.4% in the first column applies only to Lynda Pinn, whose chargeable salary is 2.3% of
the total; the 24.4% in the second column applies to the other employees.
V- Staff.Time Substantiation
This provides backup on the time shown for each employee, in the order listed above.
A- Chert Jackson, Former Housing Administrator
In her three-page letter, attached, Chert reports that she"shouldered major
responsibility for carrying out the many duties needed to prepare Lytton IV for a
successful opening". The time she spent on Lytton IV covered this broad range of
demands:
1-Attirmative Fair Housing Marketing Program
2-Tenant Selection and Move-Ins
3-Furniture Selection, Purchase and Installation
4-Safety Systems
5-Maintenance and Office Equipment and Supplies
6-Plan of Operation
17-Staff Selection
8- Relocation
9- Board of Directors’ Meetings
10- Initial Operating Budget
11- Job-Site Meetings
12- Negotiations with Neighbors
13- Punchlist Preparation
14- Lytton IV Dedication Event
In her letter she states t~hat at 16ast 65% of her time was devoted d~irectly to Lytton IV in
the year prior to Opening.
B-Jan Fliegel, Former.Administrative Assistant and Lytton IV Occupancy
Specialist
Jan Fliegel participated so extensively in Lytton IV duties that she received special
recognition for those accomplishments. Her work on Lytton IV that merited the
distinction is described in the attached 5/1/95 memo from Chert Jackson, her superior.
This attachment attests to Jan’s Lytton IV activities that were essential to prepare the
project for an opening. In her 3/25/97 statement, enclosed, she estimates that
approximately 75% of her time was spent on Lytton IV in the year prior to opening.
C- Vera T, Goupille, President and Chief Executive Officer
Vera Goupille’s. attached 4/21/97 memo details her supervisory work, plus the duties
that were largely peculiar to her position, as shown on.the next page:
~- Conferring with Board Members
2- Advance preparation and discussions at Board meetings
3- Participation at job-site meetings
4- Making special visits to the site
5- Decision.making on finishes/colors/materials
6- Conferring with members of the Development Team
17- Processing the Project Rental Assistance Contract for execution
18,: Conferring with HUD officials ’
As affL,’med in her letter, her best recollection is that 15% of her time was devoted to
Lytton W from September 1994 through April 1995, although this limited period by no
means covers her reimbursable work on Lytton W.
D- Robert Rowe, Controller Prior to His Demise in March 1995
I know at first hand Bob Rowe’s involvement in ’Lytton W. Among other things he
.prepared the disbursement requests to HUD (with all of the required detail and
supporting data), made payments to vendors, dealt with vendors, prepared special
reports, and kept the records on Lytton W financial transactions. Assuredly, this work
had to be done to complete the project.
His service in this capacity long antedated the 12/8/93 initial loan closing. If his time
on Lytton IV were figured only from initial close to date of death--a 16-month
period---salary would far exceed the $9,654 attributed to him in this request. The $9,654
is used because that is the figure previously presented to the City. It covered only the
period from 9/94 to 3/95, and reflects only some 22% of salary.
E- Anees Azad, Former Chief Financial Officer
Anees entered on duty as CliO in February 1995. He had to pick up the pieces after Bob
Rowe’s sudden demise and discharge the same duties, in addition’ to other Lytton IV
demands upon his time. His 4/3/97 letter to me is attached, in ~hich he states that 20%
of his time went to LyttOn W.
F- Lynda Pinn, Former Executive Secretary
Lynda was Executive Secretary to Vera Goupille, CEO, who recollects in her attached
memo that for the period shown Lynda devoted 7.5% of her time on Lytton IV.
Jonathan Wilson, Project Manager
The Lytton IV Dedication claimed about 20% of Jonathan’s time from mid-February
through April’s end, as indicated in his factual 4/4/97 memo to me, attached.
The Dedication Ceremony is a seminal event in the opening of a project. It took a lot of
advance planning, and some considerable out-of-pocket expense, which we will
address later.
Twenty percent of Jonathan’s time for the period specified tallies out at $1,656.
V~- Reimbursable Hard Costs
Thus far, the City has approved reimbursement of .$43,707 for the following hard costs:
Air Conditioner for Community Room and Ubrary
Screen Doors for Apartments
StoragO Lockers
Security Gate C~osures & Fence Above Garage Entrance
Pump Station for Emercjenc!( Generator ,
Total
20,000
10,20O
8,907
3,000
1,600
431707
Reimbursement will be made when City pre-conditions are met. Although the City would
much prefer to effect hard-cost reimbursement by this June 30, fiscal year end, satisfaction
of the pre-conditions will extend beyond that date.
However, two reimbursable hard costs have already been incurred, as follows:
Change Orders Paid by CHIOut.of-Pocket Dedica!io,n’ Expenses
Total
8,943
3,442
12~385
A- Change Orders Approved by HUD--but not Funded by HUD
City staff has already shown willingness to reimburse CHI for change orders paid out of
its own funds. This amounts to $8,943.
HUD approved the changes to contract documents submitted by Contractor and CHI,
but did not permit payment for any change orders out of the Capital Advance.
Actually, HUD went into reverse, and deducted $11,625 for the approved change orders
from the original construction ~ontract price.
Hence, CHI had to pay for all the change orders, whose costs are summarized in the
following table.
IThirty-four AdditiVe Changes .Five Deductive Changes
Net Owed on Additive Changes
Paid with Funds HUD Released lrom Balcony Painting Escrow
Paid with CHI Funds
$73,242
-8,299
64,943
56,000
8,943
If my white paper to HUD on balconies hadn’t freed $56,000 from the $84,300 escrow for
painting balconies, which sum was then used to pay for change orders, CHI would
have perforce applied to the City for reimbursement ot the entire $64,943. However,
since the $56,000 did become available, CHI is now in position to apply only for the
$8,943.
There is no CHI check to Dow Builders in the amount of $8,943. But the $8,943 was
evidently included in the Final Retention payment of $13,979 to Dow Builders in check
#1139 dated 6/24/96, copy attached. Chief Financial .Officer Glennon T. Moran concurs
that the evidence supports this conclusion.
Dedication Expenses
Out-of-pocket costs for the Dedication Ceremony are shown in the following table.
Enclosures include backup invoices and copies of checks for items other than postage.
Vendor
American Printing & Copy
Sodsxho USA
Galaxy Press
Stuart Rental Company
Gunn High Jazz Ensemble
US Post Office
Service
400 Programs
Catering’
1,000 invites
Equipment Rental
Entertainment
Posta,qa
Total
Cost,
$ 95.90
1,698.05
515.02
612.54
200.00
320.00
$37441.51
VII= Payment Request
The following recap shows $117,616 in reimbursable expenses already incurredwan
understatement because staff-time was greater than $105,231, as explained above. Vera
Goupille, CHI President and CEO, has furnished in the final enclosure the expenses
Certification required by Section F of the Funding Agreement.
.ISta.Time (Partial)I = 105,23’ IIPast Hard Costs I 12,385 I
¯subtotal I 117,616
I New Hard Costs, City-Approvedtotal
The information presented in this requisition validates~ and substantiates, payment of the
entire $96,707 undisbursed remainder in the Residual Receipts Note. Accordingly, we
respectfully request City p,ayment by either of ~hese schedules:
Reimburse Community Housing, Inc~, $96,707 currently, by a dingle payment, or
Reimburse Communi.ty Housing, Inc., in two stages: $53,000 currentlywas partial
payment toward l~he more than $117,616 in salary and hard costs already incurred--
and $43,707 later for City-approved hard costs when City pre-conditions are met.
The first payment form is preferred. CHI representatives and I would be glad to confer
with you on this matter, at your call. We await your response and thank you for the
attention given to this requisition.
Sincerely,
E. Morton Schaffran
President
enclosures (16)
cc w/enclos. Gall Aldrich, Chair, Board of Directors, Community Housing, Inc.
Vera Goupille, President and CEO, Community Housing, Inc.
/Kenneth Schreiber, Director, Dept. of Planning and Community Environment
7/30/97
BARKER
ASSOCIATES
ARCHITECTS
& PLANNERS
ATTACHMENT 3
06 1997
Deparlmenl o! Pl~n~ing and
Community Enviro~ent
Cathy Siegal
City of Palo Alto Planning Department
250 Hamilton Avenue
Palo Alto, CA 994301
Re:Budget Review
Balance of financing for Lytton Gardens IV
Dear Cathy,
At the request of Gary Low, Lytton Garden’s Housing Administrator, we have reviewed the
four budget areas that were in George Hajjar’s letter to you dated May 1, 1997, to determine
if an adequate current budget hasbeen allocated for these projects.
While we have not been officially retained as the Architects for these projects until the
funding has been approved, we do have a pending contract with Lytton to facilitate the design
and construction of two of these project. We understand that the some of the funding is to
provide for the following new projects: .~
1.Air Conditioning of the Library and Community. Room
2;Storage spae~ for residents over~ the car stalls in the garage
3.Screen doors on the exterior apartment doors
4.Security gate and fence above garage
Based on our understanding of the desired scope of work for items 1 & ~ above and the bids
received for items #3 & 4, we feel that the following budget will be adequate to cover the
project costs:
1.Air Conditioning - $20,000
2.Storage - $16,600
3.Screen doors - $7000
4.Security gate and fence - $1500
Since the sum of these estimated cost for these projects fall within the allowable funding per
your letter dated 2/15/97, we believe that current funding that has been allocated is reasonable
- for these projects. Please feel free to call if you have any questions.
Sincerely,~ /
BARKER ASSOCIATES, Architects and Planners
CC: Gary Low, Lytton Gardens
114 Santa Margarita Avenue
Menlo Park, CA 94025
415/325-4504
(FAX) 4151328-6713