14-J TO: Honorable Mayor and Members of the City Council ATTENTION: Jeffrey L. Stewart, City Manager FROM: Jim DellaLonga, Director of Economic Development SUBJECT: Consideration and possible action to receive and file Amended and Restated Administration Agreement File No. with the Urban Futures Bond Administration, the City of Bellflower Successor Housing Agency, and 9920 Flora Vista, L.P., for affordable housing compliance monitoring services for the Bellflower Senior Terrace project at 9920 Flora Vista Street. DATE: EXECUTIVE SUMMARY Since 2002, Urban Futures Bond Administration, Inc. (Urban Futures) has provided affordable housing compliance monitoring services for the 180-unit Bellflower Terrace Senior Apartments at 9920 Flora Vista Street. The scope of services in their agreement involves monitoring the Regulatory Agreement and Declaration of Restrictive Covenant (Los Angeles County Recorder s No. 02-0859403) relating to two Multifamily Housing Revenue Bonds issued in 2002 to help finance Bellflower Terrace. This Agreement has been revised to include affordable housing compliance monitoring services for the Regulatory Agreement (Los Angeles County Recorder s No. 02-0859404) which also governs Bellflower Terrace. RECOMMENDATION TO CITY COUNCIL 1) Receive and file Amended and Restated Administration Agreement File No. ; or 2) Alternatively, discuss and take other action related to this item. FISCAL IMPACT Amended and Restated Administration Agreement File No. is for a not-to-exceed amount of $8,597.50 per year, which includes annual fees ($7,475), reimbursable costs (up to $375), and a 10% contingency for additional services that are pre-approved by the City (up to $747.50). Sufficient funds are available in the Successor Housing Agency s Low and Moderate Income Housing Assets Fund (LMIHAF), Account No. 974-42054-7320. Page 1 of 2 - Page 1 of 14 -
Staff Report Amended and Restated Administration Agreement File No. Urban Futures Bond Administration, Inc. and 9920 Flora Vista, L.P. Page 2 of 2 DISCUSSION In 1999, the Bellflower Redevelopment Agency (RDA) acquired 9920 Flora Vista Street and, in 2001, entered into a Development and Disposition Agreement (DDA) with 9920 Flora Vista, L.P. for the development of a 180-unit affordable senior housing complex on the site, known as Bellflower Terrace Senior Apartments. The DDA called for complex financing structures to assist in the development of the apartments. The RDA issued two Multifamily Housing Revenue Bonds with a total principal of $9,000,000, which then required various affordability covenants to be placed over the development through 2077. Given the complexity of the covenants, known as the Regulatory Agreement and Declaration of Restrictive Covenant (Los Angeles County Recorder s No. 02-0859403), in 2002 the RDA contracted with bond administrator, Urban Futures, to monitor them. Monitoring services included annually verifying the income status of each resident and determining the permissible rent levels that may be assessed, based on limits set by U.S. Housing and Urban Development (HUD). Recently, an issue arose regarding the permissible rent levels at the Bellflower Senior Terrace Apartments. In response, the City and Urban Futures reviewed the affordability agreements pertaining to the property. It was discovered that there was a second affordability covenant that was not included in Urban Futures contract. Set forth in the DDA, the covenant known as the Regulatory Agreement (Los Angeles County Recorder s No. 02-0859404) was established to ensure that the RDA achieves credit for production of affordable housing pursuant to California Health and Safety Code. It establishes a separate income and affordable rent criteria based on separate limits set by the California Department of Housing and Community Development (CDHCD), not HUD. Therefore, to ensure on-going affordability compliance, the proposed Amended and Restated Agreement would include affordable housing compliance monitoring services of the Regulatory Agreement. ATTACHMENT Amended and Restated Administration Agreement File No.... 3 - Page 2 of 14 -
Successor Housing Agency Agreement File No. (Refer RDA Agreement File No. 28 and 28.2-1) AMENDED AND RESTATED ADMINISTRATION AGREEMENT By and Among URBAN FUTURES BOND ADMINISTRATION, INC. and CITY OF BELLFLOWER SUCCESSOR HOUSING AGENCY and 9920 FLORA VISTA, L.P. Relating to BELLFLOWER TERRACE SENIORS 9920 FLORA VISTA BELLFLOWER, CA 90706 BELLFLOWER REDEVELOPMENT AGENCY MULTIFAMILY HOUSING REVENUE BONDS SERIES 2002A & 2002B REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS and DISPOSITION AND DEVELOPMENT/AFFORDABLE HOUSING AGREEMENT REGULATORY AGREEMENT Dated as of - Page 3 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 2 of 10 AMENDED AND RESTATED ADMINISTRATION AGREEMENT THIS AMENDED AND RESTATED ADMINISTRATION AGREEMENT ( Agreement ) is made and entered into as of by and among the City of Bellflower Successor Housing Agency (the Agency ), a public body, 9920 Flora Vista, L.P., a California limited partnership (the Borrower ), and Urban Futures Bond Administration, Inc. (the "Administrator") a California corporation. R E C I T A L S: WHEREAS, the former Bellflower Redevelopment Agency ( Former Agency ) issued Multifamily Housing Revenue Bonds (Bellflower Terrace Seniors), Series 2002A (the "Series A Bonds") and Subordinate Multifamily Housing Revenue Bonds (Bellflower Terrace Seniors), Series 2002B (the "Series B Bonds" and, together with the Series A Bonds, the "Bonds") in order to provide financing for a 180-unit multifamily rental housing project known as "Bellflower Terrace Seniors," pursuant to a Trust Indenture dated as of April 1, 2002 (the "Indenture") between the Agency and Wells Fargo Bank, National Association (the "Trustee"); WHEREAS, the Former Agency entered into a Regulatory Agreement and Declaration of Restrictive Covenants dated as of April 1, 2002 (L.A. County Recorder s No. 02-0859403) (the "Bond Regulatory Agreement") with the Trustee and 9920 Flora Vista, L.P. (the Borrower ), which agreement, among other things, sets forth certain restrictions applicable to the multifamily rental units being financed, which restrictions are intended to assure compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"); WHEREAS the Former Agency entered into a Regulatory Agreement (L.A. County Recorder s No. 02-0859404) relating to the Disposition and Development/Affordable Housing Agreement between the Former Agency and the Borrower (AFN 28), as later amended and restated on November 1, 2001 and March 22, 2004 (AFN 28.2-1) (the DDA Regulatory Agreement ); WHEREAS, in 2011, AB x1 26 and AB x1 27 were signed into law by the Governor effectively dissolving the Former Agency as of February 1, 2012; WHEREAS, effective February 1, 2012, the Successor Housing Agency has assumed and is performing the functions relating to housing previously performed by the Former Agency, pursuant to City Council Resolution No. 12-09; WHEREAS, the parties desire to amend and restate the Administration Agreement, dated April 1, 2002; and WHEREAS, the Administrator represents that it has the necessary experience and expertise required to ensure the Project complies with the restrictions contained in the Bond Regulatory Agreement and the DDA Regulatory Agreement. NOW, THEREFORE, in consideration of the premises and respective representations and covenants herein contained, the parties agree as follows: - Page 4 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 3 of 10 ARTICLE I DEFINITIONS, INTERPRETATION AND INTENT 1.1 Definitions of Terms. All capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings given to them in the Regulatory Agreements. 1.2 Article and Section Headings. The heading or titles of the several articles and sections hereof are solely for the convenience of reference and do not affect the meaning, construction or effect of the provisions hereof. 1.3 Interpretation. The singular form of any word used herein, including terms defined in the Regulatory Agreements, includes the plural and vice versa, if applicable. The use of a word of any gender includes all genders, if applicable. 1.4 Intent. The parties intend for this Agreement to replace the Administration Agreement dated April 1, 2002. As of the effective date of this Agreement, the 2002 Administration Agreement will be terminated. ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 2.2 Representations and Warranties of the Agency. representations and warranties: The Agency makes the following (A) It has power and authority to carry on its business as now being conducted, and is duly qualified to do such business wherever such qualification is required, including the State of California. (B) It has the power to execute and deliver this Agreement and to carry out the transactions contemplated hereby, and it has duly authorized the execution, delivery and performance of this Agreement. (C) The Administrator is independent from and not under the domination of the Agency, does not have any substantial interest, direct or indirect, in the Agency, and is not an officer or employee of the Agency. Representations and Warranties of the Administrator. following representations and warranties: The Administrator makes the (A) It is a corporation duly organized, validly existing and in good standing under the laws of the State of California and has the power and authority to carry on its business as now being conducted. (B) It has the power to execute and deliver this Agreement and to carry out the transactions contemplated hereby; and it has duly authorized the execution, delivery and performance of this Agreement. (C) It is independent from and not under the domination of the Agency, does not have any substantial interest, direct or indirect, in the Agency, and is not an officer or employee of the Agency. - Page 5 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 4 of 10 ARTICLE III DUTIES AND COMPENSATION OF THE ADMINISTRATOR 3.1 The Administrator will perform the duties as described in Attachment 1, which is incorporated herein by this reference. 3.2 In exchange for the Administrator s performance of the duties, the Agency agrees to compensate the Administrator pursuant to the Fee Schedule set forth in Attachment 2, which is incorporated herein by this reference. For all services rendered and all costs and expenses incurred pursuant to this Agreement, the Administrator will be paid in full by the Agency Representative within 45days of receipt of an invoice. ARTICLE IV TERM 4.1 Term of Agreement. This Agreement will remain in full force until terminated pursuant to the provisions of Sections 4.2 and 4.3 hereof. 4.2 Termination. At its sole discretion, the Agency may terminate this Agreement without further liability or obligation to the Administrator, upon giving the Administrator thirty (30) days written notice of its intention to do so. 4.3 Resignation of Administrator. At its sole discretion, the Administrator may resign from its position and terminate this Agreement by giving the other parties hereto thirty (30) days written notice of its intention to do so. ARTICLE V MISCELLANEOUS PROVISIONS 5.1 INDEMNIFICATION. Administrator agrees to the following: Indemnification for Professional Services. Administrator will save harmless and indemnify and at Agency s request reimburse defense costs for Agency and all its officers, volunteers, employees and representatives from and against any and all suits, actions, or claims, of any character whatever, brought for, or on account of, any injuries or damages sustained by any person or property resulting or arising from any negligent or wrongful act, error or omission by Administrator or any of Administrator s officers, agents, employees, or representatives, in the performance of this Agreement, except for such loss or damage arising from Agency s sole negligence or willful misconduct. Indemnification for other Damages. Administrator indemnifies and holds Agency harmless from and against any claim, action, damages, costs (including, without limitation, attorney s fees), injuries, or liability, arising out of this Agreement, or its performance, except for such loss or damage arising from Agency s sole negligence or willful misconduct. Should Agency be named in any suit, or should any claim be brought against it by suit or - Page 6 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 5 of 10 otherwise, whether the same be groundless or not, arising out of this Agreement, or its performance, Administrator will defend Agency (at Agency s request and with counsel satisfactory to Agency) and will indemnify Agency for any judgment rendered against it or any sums paid out in settlement or otherwise. For purposes of this section Agency includes the City of Bellflower s officers, officials, employees, agents, representatives, and certified volunteers. It is expressly understood and agreed that the foregoing provisions will survive termination of this Agreement. The requirements as to the types and limits of insurance coverage to be maintained by Administrator as required by Section 5.1, and any approval of said insurance by Agency, are not intended to and will not in any manner limit or qualify the liabilities and obligations otherwise assumed by Administrator pursuant to this Agreement, including, without limitation, to the provisions concerning indemnification. 5.2 INSURANCE. Before commencing performance under this Agreement, and at all other times this Agreement is effective, Administrator will procure and maintain the following types of insurance with coverage limits complying, at a minimum, with the limits set forth below: Type of Insurance Limits Commercial general liability: $2,000,000 Professional Liability $1,000,000 Business automobile liability $1,000,000 Workers compensation Statutory requirement Commercial general liability insurance will meet or exceed the requirements of the most recent ISO-CGL Form. The amount of insurance set forth above will be a combined single limit per occurrence for bodily injury, personal injury, and property damage for the policy coverage. Liability policies will be endorsed to name Agency, its officials, and employees as additional insureds under said insurance coverage and to state that such insurance will be deemed primary such that any other insurance that may be carried by Agency will be excess thereto. Such endorsement must be reflected on ISO Form No. CG 20 10 11 85 or 88, or equivalent. Such insurance will be on an occurrence, not a claims made, basis and will not be cancelable or subject to reduction except upon thirty (30) days prior written notice to Agency. - Page 7 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 6 of 10 Professional liability coverage will be on an occurrence basis if such coverage is available, or on a claims made basis if not available. When coverage is provided on a claims made basis, Administrator will continue to renew the insurance for a period of three (3) years after this Agreement expires or is terminated. Such insurance will have the same coverage and limits as the policy that was in effect during the term of this Agreement, and will cover Administrator for all claims made by Agency arising out of any errors or omissions of Administrator, or its officers, employees or agents during the time this Agreement was in effect. Automobile coverage will be written on ISO Business Auto Coverage Form CA 00 01 06 92, including symbol 1 (Any Auto). Administrator will furnish to Agency duly authenticated Certificates of Insurance evidencing maintenance of the insurance required under this Agreement and such other evidence of insurance or copies of policies as may be reasonably required by Agency from time to time. Insurance must be placed with insurers with a current A.M. Best Company Rating equivalent to at least a Rating of A:VII. Should Administrator, for any reason, fail to obtain and maintain the insurance required by this Agreement, Agency may obtain such coverage at Administrator s expense and deduct the cost of such insurance from payments due to Administrator under this Agreement or terminate pursuant to Section 4.2. Self-Insured Retention/Deductibles. All policies required by this Agreement must allow Agency, as additional insured, to satisfy the self-insured retention ( SIR ) and deductible of the policy in lieu of Administrator (as the named insured) should Administrator fail to pay the SIR or deductible requirements. The amount of the SIR or deductible is subject to the approval of the City Attorney and the Finance Director. Administrator understands and agrees that satisfaction of this requirement is an express condition precedent to the effectiveness of this Agreement. Failure by Administrator as primary insured to pay its SIR or deductible constitutes a material breach of this Agreement. Should Agency pay the SIR or deductible on Agency s behalf upon the Administrator s failure or refusal to do so in order to secure defense and indemnification as an additional insured under the policy, Agency may include such amounts as damages in any action against Administrator for breach of this Agreement in addition to any other damages incurred by Agency due to the breach. ARTICLE VI MISCELLANEOUS PROVISIONS 5.1 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which is deemed to be an original and, such counterparts constitute but one and the same instrument. 5.2 Electronic Signatures. This Agreement may be executed by the Parties on any number of separate counterparts, and all such counterparts so executed constitute one agreement binding on all the Parties notwithstanding that all the Parties are not signatories to the same counterpart. In - Page 8 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 7 of 10 accordance with Government Code 16.5, the Parties agree that this Agreement, agreements ancillary to this Agreement, and related documents to be entered into in connection with this Agreement will be considered signed when the signature of a party is delivered by electronic transmission. Such electronic signature will be treated in all respects as having the same effect as an original signature. 5.3 Business Days. If any action is required to be taken hereunder on a date which falls on other than a Business Day, such action may be taken on the next succeeding Business Day. 5.4 Governing Law. This Agreement is construed in accordance with the laws of the State of California and the obligations, rights and remedies of the parties hereunder will be determined in accordance with such laws. 5.5 Notices. All notices, certificates or other communications hereunder must be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, addressed to the appropriate Notice Address set forth in the Administrative Agreement. The Notice Address of the Administrator is: Urban Futures Bond Administration, Inc. Raette Frazeur, Vice President 3111 N Tustin St., Suite 110 Orange, CA 92865 Phone: (714) 332-1000 x3571 raette@ufbahc.com The Notice Address of the Agency Representative is: City of Bellflower Successor Housing Agency Jim DellaLonga, Director of Economic Development 16600 Civic Center Drive Bellflower, CA 90706 (562) 804-1424 x2224 jdellalonga@bellflower.org The Notice Address of the Borrower is: Corporation for Better Housing Lori Koester, Executive Director 21031 Ventura Blvd., Suite 200 Woodland Hills, CA 91364 (818) 905-2430 ext. 201 lkoester@corpoffices.org - Page 9 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 8 of 10 Urban Futures Bond Administration, Inc., as Administrator By: Marshall F. Linn, President/CEO City of Bellflower Successor Agency as Agency Representative By: Jeffrey Stewart, City Manager 9920 Flora Vista, L.P. as Borrower By: Lori Koester, Executive Director Corporation for Better Housing, its Managing General Partner ATTEST: Mayra Ochiqui, City Clerk APPROVED AS TO FORM: Karl H. Berger, City Attorney - Page 10 of 14 -
- Page 11 of 14 -
- Page 12 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 9 of 10 Attachment 1 - Scope of Services Urban Futures Bond Administration, Inc. The City of Bellflower Successor Housing Agency is contracting with Urban Futures Bond Administration, Inc. (the Administrator ) to provide compliance services for the Bellflower Redevelopment Agency Bond and DDA Regulatory Agreements. The property subject to those Agreements consists of 180 units restricted for occupancy by Very Low- and Lower-income Senior households. As the consultant, the Administrator s staff will monitor the project pursuant to the Regulatory Agreements and provide the Agency s staff with the services and support necessary to monitor for compliance. COMPLIANCE MONITORING TASK 1 Annual Rent & Income Limits: Calculate and distribute annual rent and income limits as required by the Bellflower Redevelopment Agency Bond and DDA Regulatory Agreement based on the Area Median Income as determined by the United States Department of Housing and Urban Development and California Department of Housing and Community Development. Provide Agency with Income Certifications, Certifications of Continuing Program Compliance and all other reports and certificates furnished to it pursuant to the Regulatory Agreement in order to determine that each such document is complete and to verify the internal accuracy of the calculations. TASK 2 Review Annual Reporting for Compliance Establish parameters for annual reporting Collect and review annual reports for compliance with affordability restrictions as required by the Bellflower Redevelopment Agency Bond and DDA Regulatory Agreements to verify: o tenant income and rents do not exceed annual limits o tenant income certifications and/or recertifications o unit set-aside restrictions o documentation to be save and processed electronically via the Administrator s Compliance Monitoring System (CMS) TASK 3 Annual California Debt Limit Allocation Committee (CDLAC) Reporting Prepare and file all initial and annual reports required by Section 8855.5 of the Government Code of the State of California with respect to the Project. Make at least one site visit annually. At no additional costs, provide training to the property manager of the Project or other agent of the Borrower charged with compliance with the provisions of the Regulatory Agreement. The Administrator has established various tools for collecting, tracking and processing data for compliance monitoring that are both cost effective and efficient. We have developed a customized web based application that offers full transparency to our clients and provides them with 24/7 access to all of their project information. This system is internet based and enables property owners/managers to access their information on-line including tenant support documentation. - Page 13 of 14 -
Amended and Restated Administrative Agreement File No. XXX Page 10 of 10 Attachment 2 - Fee Schedule Urban Futures Bond Administration, Inc. Annual Compliance Administration TOTAL PROJECT COST - 510 Total Units/51 Restricted Units UNITS RATE TOTAL TASKS 1 2 Annual Compliance Monitoring Services: 180 $20 $ 3,600 Bond Regulatory Agreement 180 $20 $ 3,600 DDA Regulatory Agreement $ 275 TOTAL Annual Fees $ 7,475 Reimbursable Costs (incl. travel, postage and related administrative charges will be billed at actual cost.) $ 375 As Needed: Services performed outside Tasks 1-3 that are preapproved by the City in writing Capped at 10% of Annual Fees ($747.50) TASK 3 Annual California Debt Limit Allocation Committee (CDLAC) Reporting n/a n/a PAYMENT SCHEDULE: Fees to be invoiced annually by June 1st for costs incurred from the year prior (June 1st to May 31st). Administrator will provide Income Certifications, Certifications of Continuing Program Compliance and other compliance related reports and documentation with invoice. Hourly Rates (provided for services requested outside of scope): Vice President $ 135 Compliance Lead $ 95 Compliance Specialist $ 65 Jr. Compliance Specialist $ 50 Compliance Assistant $ 40 NOTE: Services performed outside Tasks 1-3 in the Scope of Services will be charged at Administrator s hourly rates; an estimate of costs will be provided for special projects. All services outside the Scope of Services must be approved of in writing by the City s Economic Development Director prior to providing the services. - Page 14 of 14 -