HomeMy WebLinkAboutStaff Report 276-09TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER
DATE: JUNE 15, 2009
REPORT TYPE: CONSENT ITEM
DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
CMR: 276:09
SUBJECT: Approval of Agreement Between P AHC Housing Services, LLC and the
City of Palo Alto for Administration and Consulting Services for the
Below Market Rate (BMR) Housing Program in the Amount of
$155,000 for Fiscal Year 2009-10 and $160,000 for Fiscal Year
2010-11
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or designee to
execute the attached agreement with P ARC Housing Services, LLC (P ARC) for administration and
consulting services for the Below Market Rate (BMR) housing program for the two-year period of
2009-10 and 2010-11 in the amount of$155,000 for the 2010 Fiscal Year and $160,000 for the
2010 Fiscal Year.
BACKGROUND
Under contract to the City, P ARC has administered the BMR housing program since its inception
in the mid-1970s. Examples of some of the services provided by P ARC include: administering the
sales and resales of new and existing BMR owner units; maintaining the home purchase waiting
list; monitoring occupancy ofBMR rental units; providing advice and consultation to the City
regarding negotiations ofBMR agreements with developers; and addressing special issues related
to the program as a whole. Most ofP ARC's workload is involved with the home ownership
component of the BMR program. While P ARC performs most tasks required for the ongoing
administration of the home ownership and rental components of the BMR program, City Planning
staff also devotes considerable time to the BMR program, primarily on BMR negotiations and
agreements and program improvements. City Real Property staff handles maintenance evaluation
and the determination of credits for capital improvements when units come up for resale.
There are presently 238 BMR owner units in the BMR program with 22 new BMR owner units
scheduled for completion and sale over the two years of this contract (8 units in the Classics project
at 3270 West Bayshore, 7 units in SummerHill Redwood Gate at 4249 EI Camino Real, 7 units in
the Toll Brothers project at 200 San Antonio Road). P ARC maintains and annually updates a
waiting list of interested potential buyers ofBMR units. At this time, there are close
to 600 households on this waiting list with about ninety percent qualifying for the live and I or work
in Palo Alto preference. P ARC coordinates the sale of both newly built BMR units and the resale
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of existing units. Sales activities include: establishing the resale price; marketing units to the
waiting list; scheduling open houses; qualifying and selecting the buyers; coordinating the
transaction between the buyer, seller, lender and escrow; and explaining the requirements of the
BMR deed restrictions. P AHC maintains a database on all units and keeps statistics on the number
and characteristics of the households served by the program.
The owner BMR units require periodic monitoring of occupancy and title, which P AHC handles in
cooperation with Planning staff and the City Attorney's Office. Monitoring and enforcement of the
recorded deed restrictions has become a critical task requiring nlore ofP AHC and City staff time.
Monitoring activities include reviewing online assessor's records to detect transfers in title or
ownership and an annual letter to owners to remind them of pro gram rules and to provide updates
on procedural changes. When a violation of the deed restrictions is discovered, P AHC undertakes
initial attempts to remedy the situation. More complex enforcement matters are referred to
Planning or to the City Attorney, if legal action is required. Since the inception of the program,
eight units have been involved in litigation or significant legal efforts to retain thenl in the program,
with six of those cases in the last seven years.
Information workshops for prospective buyers on the waiting list are conducted quarterly by P AHC
together with housing counseling staff from Project Sentinel. These workshops focus on
preparation for homeownership, understanding credit and mortgage financing and the nLles of the
BMR program. The workshops have been well received, with about 100 persons attending each
year. The waiting list workshops will be continued over the next two years.
There are currently 155 BMR rental units in six different projects. P AHC' s primary tasks with the
BMR rental progranl are: ongoing training of the on-site property management personnel and
reviewing tenant qualifications and BMR rents. P AHC collects and reviews applicants'
certification documentation and determines eligibility under the program rules. They also conduct
recertification of existing tenants. P AHC monitors each complex's waiting list and tenant selection
process. Due to the frequent turnover of apartment management staff, P AHC must devote
considerable time and effort to explaining the B:NLR program ndes and procedures to new personnel
each year.
DISCUSSION
The proposed fimding level assumes that P AHC's workload administering the BMR program will
increase over the next two years. Marketing and sales of the 22 new owner units and assisting in
the marketing of the 24 new units (12 independent and 12 assisted living units) in the Center for
Jewish Life Campus represent significant activities. City and PAHC staffbelieve that resale
activity will remain steady at about five to eight units per year due to continued turnover from aging
owners, but resale levels are very hard to predict. In addition, P AHC staff will be more involved in
updating the BMR Policy and Procedures Manual to reflect Council's recently approved changes to
the BMR Program.
As in preceding years, this agreement is a sole source contract. There is no other entity that
provides, or is capable of providing, the total package of services required by the City for the BMR
program. A few services, such as income certifications of buyers and tenants, are provided by the
Santa Clara County Housing Authority for other local inclusionary housing progranls.
Another entity, Bay Area Home Buyer Agency (BARBA), offers BMR unit marketing, sales and
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portfolio management services. BARBA has a linlited track record at this time and cannot offer a
local office or staff presence; its approach seems best suited to developers that must find buyers for
affordable units in localities with newly established BMR programs. In addition, there is great
value in the historical and institutional knowledge that P AHC staff and its Board members have
developed over its years of involvement with the program. If the City were to provide these same
services in-house, City staffing levels would have to be increased by at least two full time positions
based on the time spent by P AHC staff as reflected in P AHC' s quarterly statement sent to the City
for review and approval.
P AHC has submitted a proposal to continue providing the City with BMR administration services
on a tinle and materials basis for the next two years at hourly billing rates shown in the attached
Exhibit B, with a maximum budget of$155,000 for the first year and $160,000 for the second year.
Totalcosts for the next two years represent an increase of about ten percent over the previous two
years' contract costs. Staffbe1ieves that the increase is reasonable and acceptable given the
projected increase in activities associated with the administration of the BMR program.
P ARC was able to secure liability and other insurance coverage in the last year for its BMR
program activities at a lower cost, which helps limit the growth in the cost of its services. In
addition, P AHC staff is considering charging fees to developers, owners and applicants to defray
costs. For example, PAHC has instituted an annual $15 waiting list fee to help cover printing and
mailing costs ofBMR sales information; this fee has brought in about $9,000.
RESOURCE IMPACT
PARC's administration of the BMRprogram has historically been funded from the Residential
Housing Fund, which is a special revenue fund created to support all types of affordable housing
programs. Revenue for the Residential Fund is primarily from BMR in-lieu fees collected from
developers of residential projects that are allowed to pay iIl:"lieu fees (instead of providing BMR
units or in return for providing fewer units). Fee payments are permitted for very small projects
when less than one full BMR unit is owed or when the City determines that no other alternative is
feasible.
The Residential Housing Fund includes a budget for the $350,000 total cost for PAHC's contract
services over the next two fiscal years. The Residential Fund's available balance is currently about
$685,000.
POLICY IMPLICATIONS
The recommendation in this staff report does not represent any change to City policies.
Implementation of this Agreement is consistent with the City's Housing Element and various
housing policies that support the provision of affordable housing and a variety of housing
opportunities.
ENVIRONMENTAL REVIEW
The approval of an agreement for administrative and conSUlting services is not an action subject to
environmental review under the California Environmental Quality Act.
ATTACHMENTS
Attachment A: Agreement Between the City of Palo Alto and the Palo Alto Housing
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Corporation For Below Market Rate Housing Program Administrative
Services (for Fiscal Years 2009-10 and 2010-11)
Attachment B: Chart Titled: Below Market Rate (BMR) Program Contract Costs,
Services and Accomplishments
COURTESY COPIES
Palo Alto Housing Coporation
PREPARED BY:
ON ~ 1J.ABIERA
Senior Planner
DEPARTMENT HEAD REVIEW: -----'C~~p.wtA~:a----W~~....,.~-=---=.::!I~'c....;..~~"'-----
CURTIS WILLIAMS
Interim Director
Planning and Community Environment
CITY MANAGER APPROV AL:
City Manager
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ATTACHMENT A
CONTRACT NO. __ _
BETWEEN THE CITY OF PALO ALTO AND
PAHC HOUSING SERVICES, LLC FOR
BELOW MARKET RATE HOUSING PROGRAM
ADMINISTRATIVE SERVICES
This Contract No. is entered into , 2009, by and
between the CITY OF PALO ALTO, a chartered city and a municipal corporation of the State of
California ("CITY"), and P AHC HOUSING SERVICES, LLC ("CONTRACTOR"), a California
nonprofit corporation, located at 725 Alma Street, Palo Alto, CA 94301 (Taxpayer Identification
Number 91-2198771).
RECITALS:
WHEREAS, CITY desires certain administrative and consulting services ("Services"),
in connection with the City's below market rate housing program as more fully described in Exhibit
"A"; and
WHEREAS, CITY desires to engage CONTRACTOR, including its employees, if
. any, in providing the Services by reason of its qualifications and experience in performing such
Services, and CONTRACTOR has offered to provide the Services on the terms and in the manner set
forth herein;
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Contract, the parties agree:
SECTION 1. TERM
1.1 This Contract will commence on July 1, 2009 and shall continue for a period
not to exceed two (2) years terminating on June 30, 2010. The obligation of CONTRACTOR to
perform the Services will commence in accordance with the time schedule set forth in Exhibit "A".
Time is of the essence of this Contract. In the event that the Services are not completed within the
specified time schedule on account of Contractor's default, CITY's City Manager will have the option
of extending the time schedule for any period of time. This provision will not preclude the recovery
of damages for delay caused by CONTRACTOR.
SECTION 2. QUALIFICATIONS, STATUS, AND DUTIES OF CONTRACTOR
2.1 CONTRACTOR represents and warrants that it has the expertise and
professional qualifications to furnish or cause to be furnished the Services. CONTRACTOR further
represents and warrants that the project director and every individual charged with the performance
of the Services under this Contract are duly licensed or certified by the State of California, to the
extent such licensing or certification is required by law to perform the Services.
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2.2 In reliance on the representation and warranty set forth in Section 2.1, CITY
hires CONTRACTOR to perform, and CONTRACTOR covenants and agrees that it will furnish or
cause'to be furnished, the Services set forth in the document entitled "Below Market Rate Housing
Program, Fiscal Years 2009-2010 and 2010-2011, Scope of Services" in Exhibit "A".
2.3 CONTRACTOR will assign CANDICE GONZALEZ, its Executive Director,
as the project director to have supervisory responsibility for the performance, progress, and execution
of the Services. If circumstances or conditions subsequent to the execution of this Contract cause the
substitution of the project director for any reason, the appointment of a substitute project director
will be subject to the prior written approval of the project manager.
2.3.1 Not more than forty-nine percent (49%) of the persons serving on the governing
board of CONTRACTOR may be interested persons. The term "interested persons" is defined in
Section 5227(a) of the California Corporations Code.
2.4 CONTRACTOR represents and warrants that it will:
2.4.1 Procure all permits and licenses, pay all charges and fees, and give all notices
which may be necessary and incident to the due and lawful prosecution of the Services;
2.4.2 Keep itself fully informed of all existing and future Federal, State of
California, and local laws, ordinances, regulations, orders, and decrees which may affect those
engaged or employed under this Contract, any materials used in CONTRACTOR's performance
under this Contract, or the performance of the Services;
2.4.3 At all times observe and comply with, and cause its employees and contractors
(and consultants), if any, who are assigned to the performance of this Contract to observe and comply
with, the laws, ordinances, regulations, orders and decrees mentioned above; and
2.4.4 Will report immediately to the project manager, in writing, any discrepancy or
inconsistency it discovers in the laws, ordinances, regulations, orders, and decrees mentioned above
in relation to any plans, drawings, specifications or provisions of this Contract.
2.5 Any reports, information, data or other material given to, or prepared or
assembled by, CONTRACTOR or its contractors, if any, under this Contract will become the
property of CITY and will not be made available to any individual or organization by
CONTRACTOR or its contractors, if any, without the prior written approval of the city manager.
2.6 CONTRACTOR will provide CITY with quarterly reports. With each
quarterly billing, CONTRACTOR shall submit a summary chart of statistics about sales and resales
ofBMR ownership units, in a form approved by CITY, together with information about occupancy
ofBMR rental units. CONTRACTOR shall also submit a report, describing in narrative form, other
activities undertaken during the report period.
2.7 If CITY requests additional copies of reports, drawings, specifications or any
other material which CONTRACTOR is required to furnish in limited quantities in the performance
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of the Services, CONTRACTOR will provide such additional copies and CITY will compensate
CONTRACTOR for its duplication costs.
2.8 CONTRACTOR will be responsible for employing or engaging all persons
necessary to perform the Services. All contractors of CONTRACTOR will be deemed to be directly
controlled and supervised by CONTRACTOR, which will be responsible for their performance. If
any employee or contractor of CONTRACTOR fails or refuses to carry out the provisions of this
Contract or appears to be incompetent or to act in a disorderly or improper manner, the employee or
contractor will be discharged immediately from further performance under this Contract on denland
of the project manager.
2.9 CONTRACTOR shall provide the project manager and others specifically
requested by the project manager with free and easy access to all facilities and activities of the
programs hereinafter described. The projectmanager and others spe~ifically requested by the project
manager shall coordinate such access with CONTRACTOR.
SECTION 3. DUTIES OF CITY
3.1 CITY will furnish or cause to be furnished the specified services set forth in
Exhibit "A" and such other information regarding its requirements as may be reasonably requested by
CONTRACTOR.
3.2 The city manager will represent CITY for all purposes under this Contract.
The Advance Planning Manager is designated as the project manager for the City Manager. The
project manager will supervise the performance, progress, and execution of the Services.
3.3 If CITY observes or otherwise becomes aware of any default in the
performance of CONTRACTOR, CITY will use reasonable efforts to give written notice thereof to
CONTAACTOR in a timely manner.
SECTION 4 -COMPENSATION
4.1 In consideration of the full performance of the Services by CONTRACTOR,
CITY will pay CONTRACTOR a total sum not to exceed One Hundred Fifty-Five Thousand Dollars
($155,000.00) for the first contract year. Total compensation for the second year shall not exceed
One Hundred Sixty Thousand Dollars ($160,000) plus any unused portion from the prior contract
year, provided such carryover is approved by the City Council. All compensation shall be subject to
the provisions of section 15.11 of this Contract. All compensation shall be payable within thirty (30)
days of submission by CONTRACTOR of its itemized billings On the billing form provided by
CITY, CONTRACTOR shall submit a bill by the fifth (5th) working day of each quarter for services
provided under this Contract during the preceding quarter. The bill shall specify actual expenditures
directly related to this Contract in accordance with Exhibit "B".
SECTION 5. AUDITS
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5.1 CONTRACTOR will permit CITY to audit, at any reasonable time during the
term of this Contract and for three (3) years thereafter, CONTRACTOR's records pertaining to
matters covered by this Contract. CONTRACTOR further agrees to maintain and retain such records
for at least three (3) years after the expiration or earlier termination of this Contract.
SECTION 6. INDEMNITY
6.1 CONTRACTOR agrees to indemnify, defend and hold harmless CITY, its
Council members, officers, employees and agents from any and all demands, claims, or liability of
any nature, including death or injury to any person, property damage or any other loss, caused by or
arising out of CONTRACTOR's, its officers', agents', subcontractors' or employees' negligent acts,
errors, or omissions, or willful misconduct, or conduct for which applicable law may impose strict
liability on CONTRACTOR in the performance of or failure to perform its obligations under this
Contract.
SECTION 7. WAIVERS
7.1 The waiver by either party of any breach or violation of any covenant, term,
condition or provision of this Contract, or of the provisions of any ordinance or law, will not be
deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any
subsequent breach or violation of the same or of any other term, covenant, condition, provision,
ordinance or law. The subsequent acceptance by either party of any fee or other money which may
become due hereunder will not be deemed to be a waiver of any preceding breach or violation by the
other party of any term, covenant, condition or provision of this Contract or of any applicable law or
ordinance.
7.2 No paynlent, partial payment, acceptance, or partial acceptance by CITY will
operate as a waiver on the part of CITY of any of its rights under this Contract.
SECTION 8. INSURANCE
8.1 CONTRACTOR, at its sole cost and expense, will obtain and maintain, in full
force and effect during the term of this Contract, the insurance coverage described in Exhibit "C",
insuring not only CONTRACTOR and its contractors, if any, but also, with the exception of workers'
compensation, employer's liability, and professional liability insurance, naming CITY as an
additional insured concerning CONTRACTOR's performance under this Contract.
8.2 All insurance coverage required hereunder will be provided through carriers
with Best's Key Rating Guide ratings of A:VII or higher which are admitted to transact insurance
business in the State of California. Any and all contractors of CONTRACTOR retained to perform
Services under this Contract will obtain and maintain, in full force and effect during the term of this
Contract, identical insurance coverage, naming CITY as an additional insured under such policies as
required above.
8.3 Certificates of such insurance, preferably on the forms provided by CITY, will
be filed with CITY concurrently with the execution of this Contract. The certificates will be subject
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to the approval of CITY's risk manager and will contain an endorsement stating that the insurance is
primary coverage and will not be canceled or altered by the insurer except after filing with CITY's
city clerk thirty (30) days' prior written notice of such cancellation or alteration, and that the City of
Palo Alto is named as an additional insured except in policies of workers' compensation, employer's
liability, and professional liability insurance. Current certificates of such insurance will be kept on
file at all times during the term of this Contract with the city clerk.
8.4 The procuring of such required policy or policies of insurance will not be
construed to limit CONTRACTOR's liability hereunder nor to fulfill the indemnification provisions
of this Contract. Notwithstanding the policy or policies of insurance, CONTRACTOR will be
obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as
a result of the Services performed under this Contract, including such damage, injury, or loss arising
after the Contract is terminated or the term has expired.
SECTION 9. WORKERS' COMPENSATION
9.1 CONTRACTOR, by executing this Contract, certifies that it is aware of the
provisions of the Labor Code of the State of California which require every employer to be insured
against liability for workers' compensation or to undertake self-insurance in accordance with the
provisions of that Code, and certifies that it will comply with such provisions, as applicable, before
commencing the performance of the Services.
SECTION 10. TERMINATION OR SUSPENSION OF CONTRACT OR
SERVICES
10.1 The city manager may suspend the performance of the Services, in whole or in
part, or terminate this Contract, with or without cause, by giving thirty (30) days' prior written notice
thereof to CONTRACTOR. Upon receipt of such notice, CONTRACTOR will immediately
discontinue its performance of the Services.
10.2 CONTRACTOR may terminate this Contract or suspend its performance of
the Services by giving thirty (30) days' prior written notice thereof to CITY, but only in the event of a
substantial failure of performance by CITY or in the event CITY indefinitely withholds or withdraws
its request for the initiation or continuation of the Services to be performed.
10.3 Upon such suspension or termination by CITY, CONTRACTOR will be paid
for the Services actually rendered to CITY on or before the effective date of suspension or
termination; provided, however, if this Contract is suspended or terminated on account of a default
by CONTRACTOR, CITY will be obligated to compensate CONTRACTOR only for that portion of
the Services which are of direct and immediate benefit to CITY, as such determination may be made
by the city manager acting in the reasonable exercise of her discretion.·
10.4 Upon such suspension or termination, CONTRACTOR will deliver to the city
manager immediately any and all copies of studies, sketches, drawings, computations, and other data,
whether or not completed, prepared by CONTRACTOR or its contractors, if any, or given to
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CONTRACTOR or its contractors, if any, in connection with this Contract. Such materials will
become the property of CITY.
10.5 The failure of CITY to agree with CONTRACTOR's independent findings,
conclusions, or recommendations, if the same are called for under this Contract, on the basis of
differences in matters of judgment, will not be construed as a failure on the part of CONTRACTOR
to fulfill its obligations under this Contract.
SECTION 11. ASSIGNMENT
11.1 This Contract is for the personal services of CONTRACTOR, .therefore,
CONTRACTOR will not assign, transfer, convey, or otherwise dispose of this Contract or any right,
title or interest in or to the same or any part thereof without the prior written consent of CITY. A
consent to one assignment will not be deemed to be a consent to any subsequent assignment. Any
assignment made without the approval of the city manager will be void and, at the option of the city
manager, this Contract may be terminated. This Contract will not be assignable by operation of law.
SECTION 12. NOTICES
12.1 All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
To CITY:
With a
copy to:
Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
Director, Dept. of Planning
and Community Environment
City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
To CONTRACTOR: Attention of the project director
at the address of CONTRACTOR recited above
SECTION 13. CONFLICT OF INTEREST
13.1 In accepting this Contract, CONTRACTOR covenants that it presently has no
interest, and will not acquire any interest, direct or indirect, fmancial or otherwise, which would
conflict in any manner or degree with the performance of the Services.
13.2 CONTRACTOR further covenants that, in the performance of this Contract, it
will not employ any contractor or person having such an interest. CONTRACTOR certifies that no
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person who has or will have any financial interest under this Contract is an officer or employee of
CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto
Municipal Code and the Government Code of the State of California.
SECTION 14. NONDISCRIMINATION
14.1 As set forth in the Palo Alto Municipal Code, no discrimination will be made
in the employment of any person under this Contract because of the age, race, color, national origin,
ancestry, religion, disability, sexual preference or gender of that person. If the value of this Contract
is, or 'may be, five thousand dollars ($5,000) or more, CONTRACTOR agrees to meet all
requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in employment,
including completing the requisite form furnished by CITY and set forth in Exhibit "D".
14.2 CONTRACTOR agrees that each contract for services with an independent
provider will contain a provision substantially as follows:
"[Name of Provider] will provide CONTRACTOR with a certificate
stating that [Name of Provider] is currently in compliance with all
Federal and State of California laws covering nondiscrimination in
employment; that [Name of Provider] will pursue an affirmative
course of action as required by the Affirmative Action Guidelines of
the City of Palo Alto; and that [Name of Provider] will not
discriminate in the employment of any person under this contract
because of the age, race, color, national origin, ancestry, religion,
disability, sexual preference or gender of such person."
14.3 If CONTRACTOR is found in violation of the nondiscrimination provisions
of the State of California Fair Employment Practices Act or similar provisions of Federal law or
executive order in the performance of this Contract, it will be in default of this Contract. Thereupon,
CITY will have the power to cancel or suspend this Contract, in whole or in part, or to deduct the
sum of twenty-five dollars ($25) for each person for each calendar day during which such person was
subjected to acts of discrimination, as damages for breach of contract, or both. Only a finding of the
State of California Fair Employment Practices Commission or the' equivalent federal agency or
officer will constitute evidence of a breach of this Contract.
SECTION 15. MISCELLANEOUS PROVISIONS
15.1 CONTRACTOR represents and warrants that it has knowledge of the
requirements of the Americans with Disabilities Act of 1990, and the Government Code and the
Health and Safety Code of the State of California, relating to access to public buildings and
accommodations for disabled persons, and relating to facilities for disabled persons.
CONTRACTOR will comply with or ensure by its advice that compliance with such provisions will
be effected in the performance of this Contract.
15.2 This Contract will be governed by the laws of the State of California,
excluding its conflicts of law.
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15.3 In the event that an action is brought, the parties agree that trial of such action
will be vested exclusively in the state courts o'f California or in the United States District Court for
the Northern District of California in the County of Santa Clara, State of California.
15.4 The prevailing party in any action brought to enforce the provisions of this
Contract' may recover its reasonable costs and attorneys' fees expended in 'connection with that
action.
15.5 This docun1ent represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations, and contracts, either written or oral.
This document may be amended only by a written instrument, which is signed by the parties.
15.6 All provisions of this Contract, whether covenants or conditions, will be
deemed to be both covenants and conditions.
15.7 The covenants, terms, conditions and provisions of this Contract will apply to,
and will bind, the heirs, successors, executors, administrators, assignees, and contractors, as the case
may be, of the parties.
15.8 If a court of competent jurisdiction finds or rules that any provision of this
Contract or any amendment thereto is void or unenforceable, the unaffected provisions of this
Contract and any amendments thereto will remain in full force and effect.
15.9 All exhibits referred to in this Contract and any addenda, appendices,
attachments, and schedules which, from time to time, may be referred to in any duly executed
amendment hereto are by such reference incorporated in this Contract and will be deemed to be a
part of this Contract.
15.10 This Contract may be executed in any number of counterparts, each of which
will be an original, but all of which together will constitute one and the same instrument.
15.11 This Contract is subject to the fiscal provisions of the Charter of the City of
Palo Alto and the Palo Alto Municipal Code. This Contract will terminate witho\1t any penalty (a) at
the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or
(b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the
fiscal year and funds for this Contract are no longer available. This Section 15.11 shall take
precedence in the event of a conflict with any other covenant, term, condition, or provision of this
Contract.
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IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Contract on the date first above written.
ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
APPROVED:
Director of Planning and
Community Environment
Director of Administrative
Services
Insurance Review
Attachments:
EXHIBIT "A": SCOPE OF SERVICES
CITY OF PALO ALTO
Mayor
P AHC HOUSING SERVICES, LLC
Name: ---------------------Title: --------------------
Name: ---------------------Title: --------------------
Taxpayer Identification No.
91-2198771
(Compliance with Corp. Code § 313 is required
if the entity on whose behalf this contract is
signed is a corporation. In the alternative, a
certified corporate resolution attesting to the
signatory authority of the individuals signing in
their respective capacities is acceptable)
EXHIBIT "B":
EXHIBIT "C":
BUDGET AND BILLING RATES
INSURANCE
EXHIBIT "D": NONDISCRIMINATION COMPLIANCE FORM
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EXHIBIT A
BELOW MARKET RATE HOUSING PROGRAM
FISCAL YEARS: 2009-10 and 2010-11
SCOPE OF SERVICES FOR BMR PROGRAM ADMINISTRATION
PAHC Housing Services LLC (PAHC) shall administer the City's Below Market Rate (BMR) housing
program in compliance with City policy, guidelines, the applicable deed restrictions and the BMR
Program Procedures Manual and in a maimer that increases affordable housing opportunities for low
and moderate-income households.
Specific Activities:
1) Provide infomlation and advice to interested persons and housing seekers about the City's BMR
ownership and rental programs including maintaining and updating the BMR portion of the P AHC
website.
2) Maintain and, at least annually, update the BMR ownership waiting list. Conduct waiting list
outreach activities to attract households with appropriate income levels, as needed.
3) Send an information letter to BMR owners once each year to keep owners informed of their
responsibilities under the deed restrictions and distribute other informational materials to owners as
appropriate or as directed by the City.
4) Annually update the list of lenders willing to lend on BMR units; conduct outreach to lenders
with branches in Palo Alto to encourage participation in the BMR program so that buyers have
sufficient choice of lenders and loan products. Maintain liaison with available homebuyer
assistance programs (such as mortgage credit certificates, Housing Trust of Santa Clara County, Cal
HF A, etc.) and provide buyers with current information about such financial assistance programs.
5) Administer the sales of newly constructed units and resales of existing units in the BMR
ownership program, and the "discount" units at the Birch Court project with City deed restrictions,
in accordance with City policies, guidelines, the applicable deed restrictions and with the Procedures
Manual, prepared by P ARC, as accepted by the City. Conduct marketing of new BMR ownership
units to help ensure a sufficient pool of qualified buyers, anticipated during this contract term are the
8 remaining BMR units at the Classic Communities project, 7 BMR units at SummerHill Redwood
Gate, the 7 BMR units at Toll Brothers.,
6) Pursue, in cooperation with the City, the preservation of BMR units within the program and
compliance and enforcement by BMR owners with the provisions of the recorded deed restrictions.
7) Provide assistance and counseling to BMR owners, in coordination with City staff, to help
owners resolve financial, occupancy or title situations that can affect the preservation of BMR
ownership units.
Exhibit A
Page 2 of3
8) Annually, coordinate and jointly conduct at least two homeownership educational workshops
specifically designed for the Palo Alto BMR program for current BMR owners and/or households
on the waiting list by subcontracting with an experienced and qualified organization.
9) Assessment Loan Program for BMR Owners:
a) Provide information regarding the assessment loan program to BMR owners and
condominium associations
b) Conduct pre-qualification screening of potential loan applicants
10) BMR Rental Program Administration:
a) For the BMR rental units at Southwood Apartments, Mayfield Apartments, 1100 Welch Road
Apartments, Montage Apartments at 4020 El Camino Real, Sunrise Assisted Living, Parker Palo
Alto, and other BMR rental units that may be newly constructed during the term of this
contract:
1) Certify tenants' income eligibility for initial occupancy and review the annual
recertifications of tenants as required by the applicable agreements between the City and
the project owners
2) Monitor tenant selection, operation of waiting lists, and designation of BMR units as
necessary
3) Provide information and training on the BMR Rental Program to property managers
b) Stanford West Apartments BMR Units:
1) Continue to provide training and information to on-site management staff on BMR
unit eligibility requirements, rents and procedures
2) Conduct an annual sample file audit of tenant selections, eligibility and income
certifications· for an appropriate portion of the .BMR households to assure compliance
with the BMR program
3) If appropriate, make recommendations to City for more comprehensive monitoring.
11) Provide advice, consultation and assistance to City staff in negotiations of BMR agreements for
new housing developments
Exhibit A
Page 3 of3
12) Coordinate the process of evaluation, negotiation and financing related to the acquisition and
rehabilitation if necessary, of off-site units or properties contributed under the BMR program
13) Assist City staff with review, adoption and implementation of changes resulting from the
evaluations of the BMR Study
14) Provide assistance, review and advice regarding preparation and adoption of a revised BMR
ordinance, revised Policies and Procedures Manual, revised ownership deed restrictions and
enforcement documents and other new materials to implement the recommendations from the
BMR Study.
15) Maintain records and statistics as required by the City, specifically:
a) Annual statistics about the BMR ownership and rental units and the households served;
and
b) A permanent database and record of all ownership units placed in the program and
statistics about current BMR owners and all households served over the life of the program,
including maintenance of files on each BMR owner unit and retention of copies of the actual
recorded deed restrictions for the ownership units; and
c) Contact information for current BMR owners with mailing labels and, when available,
telephone numbers and e-mail addresses ..
16) For the 24 BMR units (12 congregate care/independent living units and 12 assisted living units)
at the Jewish Center for Jewish Life Campus)
1) Assist in the marketing and leasing of the newly-constructed 24 BMR units.
2) Certify tenants' income eligibility for initial occupancy as required by the applicable
agreements between the City and the project owners
3) Monitor tenant selection, operation of waiting lists, and designation ofBMR units as
necessary
4) Provide information and training on the BMR Program to property managers andlor
service providers.
5) If appropriate, make recommendations to City for more comprehensive monitoring.
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BELOW MARKET RATE HOUSING PROGRAM
FISCAL YEARS: 2009-10 and 2010-11
BUDGET
-EXHIBITB
I. P AHC shall provide the services described in Exhibit A -Scope of Services during the term of
this contract and City shall reimburse P AHC for the cost of said services based on actual staff time
worked at the attached hourly billing rates, plus direct costs described below, up to a maximum of
$155,000 for fiscal year 2009-10 and $160,000 for fiscal year 20010-11, plus any unused funds
carried over from fiscal year 2008-09. The source of reimbursement to PAHC shall be from the
City'S Residential Housing Fund.
II. P AHC may bill City for the following:
1. Staff tinle spent on BMR program activities and directly related program support work at
the hourly billing rates shown herein. These hourly billing rates include actual salaries,
payroll taxes, benefits, workers compensation insurance and overhead, as shown in this
Exhibit B.
2. Direct costs, as supported by receipts, invoices, etc., which are reasonable and necessary
to conduct the activities described in Exhibit A, such as:
• Premiums for liability and errors and omissions insurance and other insurance
specifically covering PAHC's services under this Agreement, if the cost is separately
stated or can be reasonably allocated to BMR services, and with the total amount payable
not to exceed $10,000 per year
• Postage
• Advertising
• Conferences and Training
• Office Supplies
• Outside Services, Consultants including Legal Fees (except that any such services or
consultant work exceeding $3,000.00 shall be authorized in advance by City)
• PrintinglDuplicating
• Other necessary direct expenses including expenses necessary to the acquisition and / or
rehabilitation of off-site units and properties provided by developers under the BMR
program in-lieu of on-site units
Attachment B: Below Market Rate (BMR) Program Contract Costs, Services, & Accomplishments
Contract Final Amount Actual Expenses Information New Owner Resale Total Owner Rental Units Rental Units
Fiscal Year Paid by City to Owner Units Certifications Preserved or Amount PAHC by PAHC Calls Handled Units Sold Sold Units Sold Added Completed Saved
08-09 $140,000 $129,757 $129,757 318 20 3 23 3 15 0
07-08 $145,000 $145,000 $172,953 723 31 4 35 0 54 0
06-07 $135,000 $135,000 $143,830 611 1 8 9 0 3 1
05-06 $130,000 $130,000 $138,248 584 9 5 14 0 14 0
04-05 $105,500 $105,500 $117,820 600 0 4 4 42 33 2
03-04 $105,500 $105,500 $115,373 1,400 0 7 7 0 4 0
02-03* $105,000 $105,000 $124,700 1,448 0 6 6 0 12 1
01-02 $75,000 $75,000 $79,463 449 0 2 2 0 53 0
00-01 $60,000 $59,930 $59,930 340 1 6 7 63 81 1
99-00 $50,000 $50,000 $50,072 1,323 7 3 10 0 5 0
98-99* $58,372 $53,109 $53,109 872 0 3 3 5 10 1
97-98 $40,000 $35,458 $35,458 394 0 4 4 12 3 0
96-97 $50,000 $30,998 $30,998 335 1 2 3 0 1 0
95-96 $50,000 $41,737 $41,737 462 0 6 6 4 6 0
94-95 $66,700 $38,422 $38,422 707 3 5 8 0 6 1
Totals for 15 Years $1,316,072 $1,240,411 $1,331,869 10,566 73 68 141 129 300 7
Notes:
1) "Rental Units Added" includes units provided as off-site BMR low income rental housing and new rental BMR units in market rate rental projects: Emerson House Apts (4 units); Ventura Apts (12
units); Montage Apts (5 units) and Stanford West Apts (63 units, plus 42 units added in 2004-05 as the first part of the BMR component for the Hyatt Senior Residence); Parker Palo Alto Apts. (3
units).
2) "Units Preserved or Saved" are BMR owner units t~at were in danger of being lost from the program through default, foreclosure, difficulty in reselling or other problems.
3) *In FY 02-03, PAHC spent about $25,000 for an unusual level of legal fees to defend itself & the City in from litigation on a unit which had severe mold contamination from water leaks. PAHC's
insurance covered about 60% of its legal costs. In FY 98-99 the contract was amended to cover PAHC's $8,556 in legal costs on a foreclosure case.
4) This chart shows only accomplishments that can be readily quantified & doesn't describe other services performed by PAHC.
5) FY 03-04 and 04-05 and future years were funded under 2-year contracts.
6) FY 08-09 data as of March 31, 2009
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