Loading...
HomeMy WebLinkAboutStaff Report 296-05on all units and keeps statistics on the number and characteristics of the households served by the program. As part of the BMR Update Study currently underway, the BMR owner database has been expanded so that more information will be available about the units and the projects in which they are located. The owner BMR units require periodic monitoring of occupancy and title, which P ARC handles in conjunction with Planning staff and the City Attorney's Office. As the program goes on, monitoring and enforcement of the recorded deed restrictions has become a critical task that consumes more of PARC and City staff time. Monitoring activities include reviewing online assessor's records to detect transfers in title or ownership and periodic letters to owners to confirm continued their residency in the unit. When a violation of the deed restrictions is discovered, P ARC undertakes initial attempts to remedy the situation. More complex enforcement matters are referred to Planning and the City Attorney, if legal action is required. Situations with seven units have required litigation or significant legal efforts to preserve them in the program, with five of those cases in the last six years. A key component of the BMR Update Study is the development of improved deed restrictions and associated recorded enforcement documents to prevent future problems related to occupancy and financing. During the last two-year contract, P ARC initiated information workshops for current BMR unit owners and for prospective buyers on the waiting list. P ARC and the housing counseling staff from Project Sentinel jointly conducted the three workshops. The workshops were well received by the over 120 persons who attended. Additional workshops will be conducted over the next two years. There are currently 101 BMR rental units in five different projects with 43 additional rental units being converted from market rate to BMR occupancy at Stanford West Apartments, as the adjoining senior condominiums are sold this year. Completion and occupancy of 12 BMR assisted living rentals in the Sunrise Assisted Living development is·also anticipated during the term of this contract. PARC's primary tasks for the BMR rental program include ongoing training of the on- site property management personnel for the individual projects and reviewing tenant qualifications and rents. PARC collects and reviews the applicants' certification. documentation and determines their eligibility under the BMR rental program rules; recertification of existing tenants is also conducted. PARC also monitors each complex's waiting list and tenant selection process. Due to the frequent turnover of apartment management staff at most of the projects, PARC finds it necessary to devote considerable time and effort to explaining the BMR program rules and procedures to new personnel. DIscnSSION Agreement for BMR Administration for Fiscal Years 2005-06 and 2006-07: PARC has submitted a proposal to continue providing the City with BMR administration services on a time and materials basis for the next two years at hourly billing rates shown in the attached Exhibit B, with a maximum budget of $130,000 for the first year and $135,000 for the second fiscal year. The current FY 2004-05 contract is for $105,500, so the estimated maximum costs for the next two years represent projected increases of $24,500 and $29,500 respectively, or 23 to 28. percent. About $15,000 of the increase for each year is due to the following factors: $2,000 for insurance, $3,000 for increases in salary rates and benefit costs for P ARC staff, and $10,000 based on average total billable hours for the past two years. PAHC's billable work during each of the two years of the current contract has exceeded the contract budget limits by about $10,000 per year and was thus CMR:296:05 Page 2 of4 uncompensated. The remaining $10,000 to $15,000 per year of the respective increases represents the projected acceleration in the program workload as described below. Workload: The proposed funding level assumes that PAHC's workload administering the BMR program will increase substantially over the next two years. Staff believes that resale activity will remain steady or possibly increase due to turnover from aging owners and as a result of strategies to reduce title and occupancy violations identified as part of the BMR StUdy. Marketing and sales of the 22 new BMR owner units also represents a significant increase in workload. It has been over 20 years since so many new owner units have been added to the program inventory within a two-year period. Qualifying the 12 BMR residents in the Sunrise project adds to the expected workload, as does auditing the records for the 43 new BMR residents at Stanford West. P AHC will also be assisting the City in the remaining work on the BMR Study and its implementation. The scope of services also provides for a continuation of the successful workshops for owners and potential buyers. Insurance Coverage: Beginning in January 2003, to protect both the City and its own assets, PAHC secured a separate liability insurance policy providing specific coverage for its activities administering the BMR program. This policy cost PAHC $13,500 for 2004..;05 and was reimbursed as an eligible cost under the contract by the City. Insurance premiums for all types of horne ownership-related work and services continue to escalate. This year, PAHC's Board felt it prudent to add an errors and omissions rider to its policy that, together with the liability coverage, has now brought the annual insurance costs for BMR activities to $15,500 per year. As in preceding years, this agreement is a sole source contract. From the City's perspective, there is . no other entity that provides, or is capable of providing, the services required by the City for this agreement. While a few of the services, such as the review of income certifications for buyers and tenants, are provided locally by the Santa Clara County Housing Authority for a few other inclusionary housing programs, the bulk of P AH C' s services are unavailable from any other source. In addition, there is great value in the historical and institutional knowledge that P AHC staff and its Board members have developed over their years of involvement with the program. If the City were to provide these same services, an estimated two full time staff positions would be needed. RESOJJRCE IMPACT Agreement for Fiscal Years 2005-06 and 2006-07: The $265,000 total cost for PAHC's contract services for the next two fiscal years is budgeted in the Residential Housing Fund. The Residential Fund is expected to have an available balance at the end of this fiscal year of approximately $750,000. The Residential Housing Fund is a special revenue fund created to support all types of affordable housing programs, including the administrative costs of running the BMR program. Revenue for the Residential Fund is primarily from BMR in-lieu fees collected from developers of residential projects that are allowed 'to pay in-lieu fees (instead of providing BMR units). Fee payments are typically permitted when less than one full BMR unit is owed or when the housing being built is of a product type in which the City has determined it is preferable to not include BMR units, e.g:, it is extremely luxurious and expensive housing. POLICY IMPLICATIONS The recommendation in this staff report does not represent any change to City policies. CMR:296:05 Page 3 of4 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. 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 2005-2006 and 2006-2007, Scope of Services" in Exhibit" A" . 2 . 3 CONTRACTOR will assign MARLENE PRENDERGAST, 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 050614 syn 0120043 3.3 If CITY observes or otherwise becomes aware of arty default in the performance of CONTRACTOR, CITY will use reasonable efforts to give written notice thereof to CONTRACTOR 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 Thirty Thousand Dollars ($130,000.00) for the first contract year. Total compensation for the second year shall not exceed One Hundred Thirty-Five Thousand Dollars ($135,000) 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 wi thin 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 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) yea-rs 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 4 050614 syn 0120043 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, ce~tifies 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 wri tten 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 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 reconunendations, if the same 6 050614 syn 0120043 CERTIFICATE OF ACKNOWLEDGMENT (Civil Code § 1189) STATE OF LD\\{ocdS COUNTY OF :JG\\10QOf& ss. On :}\)(j'f'.., \G /d(1)S, 2005 before me, the undersigned, a Notary Publix, in and fQr said. ~ounty and State, personally appeared _, ~ l~ .. 9f,(\ -e:: t:D2;;e\ :::>00 , WITNESS my hand and official seal. IDOcii.<lXDdthl 1) Signature of Notary Public ""J •... O •• 0 ... 01 "'. " MARCIE L. MITCHELL :, ' _ Commllslon # 1447294 ;; , Notary PublIc . California ,. , santa Clara County - MyComm. ExpIreS Oct 26. 2007 12 050614 syn 0120043 Exhibit A Page 2 of3 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. 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 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 EI Camino Real and other BMR rental units that may be newly constructed during the term of this contract: 1) Certify tenants' income eligiqility 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 BMRRental 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 selection~, 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. Below Market Rate (BMR) Program Contract Costs, Services & Accomplishments I Final Amount I Information I i I ! ! Actual New I Resale Total I I Rental Units i ' Rental' Fiscal Contract I I ; Paid by City Expenses by , Calls Owner I Owner Owner ! Units i Certifications Preserved i I Year Amount i I I to PAHC PAHC Handled Units Sold Units Sold Units Sold Added Completed or Saved 04-05** $105,500 600 0 4 4 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 ° 6 6 ° 12 , 1 01-02 $75,000 $75,000 $79,463 449 ° 2 2 ° 53 ° 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 ° 5 ° 98-99* $58,372 $53,109 $53,109 872 0 3 3 5 10 1 97-98 $40,000 $35,458 $35,458 394 ° 4 4 12 3 ° 96-97 $50,000 $30,998 $30,998 335 1 2 3 0 1 ° 95-96 $50,000 $41,737 $41,737 462 ° 6 6 4 6 ° 94-95 $66,700 $38,422 $38,422 707 3 5 8 ° 6 1 93-94 $50,000 $49,351 $49,351 447 6 5 11 ~ 1-----~~ --, 1 ------------ 92-93 $40,000 $40,000 $40,000 565 1 4 5 0 ; , Totals for i i I I 13 Years $856,072 $684,505 $718,612 9,342 19 57 76 I 84 I 235 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 units added in 2004-05 as the first part of the BMR component for the Hyatt Senior Residence). 2) "Units Preserved or Saved" are BMR owner units that were in danger of being lost from the program through default, foreclosure or other problems. I I I 3) *In FY 02-03, PAHC spent about $25,000 on legal fees to defend itself & the City in the litigation on the Ramona Court unit which had severe mold contamination from water leaks. PAHC's insurance covered about 60% of its legal costs. The City reimbursed PAHC about $4,800 under this contract for legal costs in the final revised billing. FY 98-99 contract was amended to cover PAHC's $8,556 in legal costs on the Bautista Ct 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 work was funded under a 2-year contract. Data for FY 04-05 is incomplete as work is still in progress as of 6/13/05. 6) There are no pending BMR unit resales as of 06/13/05, the City recently acquired 2 units as a result of litigation & will be renovating them for resale to buyers on the waiting list. ~ a bj H:\Sheet\BMRcontract Summary.xls; 6/13/2005 ~ 3. "The City, its officers, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Subrecipient, products and completed operations of the Subrecipienti premises owned, occupied or used by the Subrecipienti or automobiles owned, leased, hired or borrowed by the Subrecipient. The coverage shall contain no special limitations on the scope of protection afforded to the City,. its officers, officials, employees, agents or volunteers." 4. "It is agreed that any insvrance maintained by the City of Palo Alto will apply in excess of, and not contribute to, insurance provided by the Subrecipient." 5. "Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers." 6. "~nsurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability." All insurance coverage required under this Agreement shall be provided through carriers with a Best's Key Rating Guide rating of X:VII or higher that are admitted to do business in the State of California. The certificate(s) of insurance evidencing such coverage shall be completed and executed by an authorized representative of the Company providing insurance, and shall be filed with and approved by the City.