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HomeMy WebLinkAboutResolution 8837RESOLUTION NO. 8837 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING CONSENT TO A NEW MANAGEMENT AGREEMENT BETWEEN PRIVATE PARTIES FOR THE OPERATION OF THE SILVER LAKE COMMONS PROPERTY WHEREAS, the city of Mounds View ("City") previously entered into a development agreement for real property located within the City, dated December 21", 1998 (the "Agreement"); and WHEREAS, the property known as Silver Lakes Commons is being purchased by a private buyer, who will enter into a management agreement with another entity to be responsible for operating and maintaining the premises; and WHEREAS, the City does not play a role with respect to such operation and maintenance, but is required to review and consent to the Management Agreement; and WHEREAS, the City's consent to the Management Agreement shall not be interpreted as obligating the City to undertake any action with respect to the ownership, operation, or maintenance of the Property; and WHEREAS, the Partnership has requested that the City acknowledge and consent to the management agreement attached hereto as Exhibit A. NOW, THEREFORE, BE IT RESOLVED, that the City does hereby acknowledge and consent to the attached management agreement. Nothing herein shall be interpreted or construed to alter, substitute, or abrogate any duty, obligation, or benefit belonging to any party under the Agreement or any amendment thereto. The sole purpose and scope of the City's acknowledgement and consent is to the change in the management agreement, and therefore the City's approval shall have no relationship to any substantive term of the Agreement, or any amendment thereto. NOW, THEREFORE, BE IT FINALLY RESOLVED THAT, the City Administrator, Mayor, and City's attorneys are hereby authorized and directed to take any and all additional steps and actions necessary or convenient to file or record the appropriate documents to facilitate the directives of the City Council as provided herein in order to accomplish the intent of this Resolution. Adopted by the City Council of the City of Mounds View this 91 day of October, 2017. CITY OF MOUNDS VIEW ZIAW Carol A. Mueller, Mayor 9-'J Nyl ikmu , Interim City Administrator 1 MANAGEMENT AGREEMENT MANAGEMENT AGREEMENT THIS AGREEMENT is effective this __ day of ___ , between ______, a ____, with its principal place of business located _____ (hereafter referred to as "Owner") and ____, a ____, with its principal place of business located at ____ (hereinafter referred to as "Agent"). WITNESSETH: In consideration of the terms, conditions and covenants hereinafter set forth, Owner and Agent mutually agree as follows: Section 1. Definitions. As used in this Agreement: 1.1. "ACC" shall mean the amended annual contributions contract dated December 21, 1998 between the MPHA and HUD. 1.2. "Authority Units" shall mean the ten (10) low income public housing units to be located within the Development pursuant to the Housing Agreement and for which the MPHA is obligated under the MPHA Regulatory Agreement to provide certain operating subsidies. 1.3. "City" shall mean the City of Mounds View, Minnesota. 1.4. "Consent Decree" shall mean the consent decree entered in the case of Hollman et al. v. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92-712. 1.5. "Development" shall mean the real property and the improvements, buildings, appurtenances and equipment thereon, known as Silver Lake Commons, located in the City of Mounds View, County of Ramsey, State of Minnesota, and consisting of fifty (50) dwelling units, forty (40) garage spaces to be rented, and no commercial space but one non-dwelling community space. 1.6. "HUD" shall mean the United States Department of Housing and Urban Development. 2 MANAGEMENT AGREEMENT 1.7. "Housing Agreement" shall mean the Housing Development Agreement dated December 21, 1998 between the MPHA, City and the Owner. 1.8. "Housing Covenants" shall mean the MPHA Act, the ACC, the Consent Decree, the Housing Agreement and the MPHA Regulatory Agreement. 1.9. "Lease" shall mean the form of agreement between the Owner and a Tenant under the terms of which said Tenant is entitled to enjoy possession of a dwelling unit. 1.10. "Low Income Housing Tax Credit Program" or LIHC Program" shall mean the provisions of Section 42, as described below, and the requirements set forth in the Low Income Housing Tax Credit Program Procedural Manual and Compliance Manual issued by MHFA. 1.11. "MHFA" shall mean the Minnesota Housing Finance Agency as established under the Provisions of the MHFA Act. 1.12. "MHFA Act" shall mean Laws of Minnesota, 1971, Chapter 702, as amended. 1.13. "MPHA" shall mean the Minneapolis Public Housing Authority in and for the City of Minneapolis. 1.14. "MPHA Act" means Section 5 of the United States Housing Act of 1937. 1.15. "MPHA Regulatory Agreement" shall mean the Regulatory and Operating Agreement dated December 21, 1998 between the MPHA, the City and the Owner. 1.16. "Non-Housing Income " shall mean all amounts actually collected by the Agent, other than as provided in Section 1.18 below, including, but not limited to (1) vending and laundry machine income, (2) income received from rental of parking spaces, garage spaces and commercial space. 1.17. "Public Agencies" shall mean the MHFA, MPHA and City, collectively. 1.18. "Rent" shall mean that monthly amount which a Tenant is obligated to pay the Owner pursuant to the terms of a Lease. 1.19. "Section 42" shall mean and refer to Section 42 of the Internal Revenue Code and any regulations and ruling issued thereunder, as it may be amended from time to time. 1.20. "Tenant" shall mean a person occupying a dwelling unit in the Development pursuant to a Lease. Section 2. Appoin tmen t of Agent. The Owner hereby appoints the Agent, and the Agent hereby accepts appointment, on the terms and conditions hereinafter provided, as 3 MANAGEMENT AGREEMENT exclusive management agent for the Development. The Agent shall carry out the obligations of the Owner as set forth in the Housing Covenants and as they relate to the management and operation of the Development; provided, however, that assumption of such obligations by the Agent shall not relieve the Owner of the responsibility therefor. Section 3. Management Plan. Attached to this Agreement as "Exhibit A" and incorporated herein by reference is a copy of a Management Plan (the "Management Plan") for the Development, which contains a detailed description of the policies and procedures to be followed in the management of the Development. In many of its provisions, this Agreement briefly defines the nature of the Agent's obligations, with the intention that reference is made to the Management Plan for more detailed policies and procedures. Accordingly, the Agent and the Owner will comply with applicable provisions of the Management Plan, regardless of whether specific reference is made thereto in any particular provision of this Agreement. To the extent the Management Plan and this Agreement are inconsistent, this Agreement shall control. Section 4. Regulation by MHFA. The Agent fully understands that the Owner is a limited-profit or non-profit housing entity whose property is subject to a Low Income Housing Land Use Restriction Agreement issued by MHFA and is required to comply with rules and regulations of the MHFA and the LIHC Program. In the performance of its duties hereunder, the Agent agrees to become conversant with and comply with the provisions of the policies, procedures, rules and regulations of the MHFA, the LIHC Program and Section 42, all as may be amended from time to time. Section 5. Authority Units. 5.1. The Agent hereby agrees to perform for and on behalf of the Owner all rights, powers, authorities and obligations of the Owner under and pursuant to the Management Plan and any relevant portions of the Housing Covenants pertaining to the day-to-day operation and maintenance of the Development and the Authority Units; it being acknowledged and agreed that the agency relationship hereby created is for the benefit and security of HUD, MPHA and City under the Housing Covenants and that this Agreement cannot be modified or terminated or the obligations of the Agent hereunder modified in any material way or terminated without the express prior written consent of the MPHA and City. 5.2. All parties hereto acknowledge that the goal of achieving long-term sustainability of the Development as a mixed-income community will be enhanced by administrative procedures and terms and conditions of occupancy which reduce discernible distinctions in maintenance and operation, and conditions of continued occupancy, between the Authority Units and other units in the Development to the greatest extent feasible while assuring that the Authority Units are available to house families who meet the occupancy objectives of the MPHA. This Agreement enumerates certain respects in which operating procedures and other requirements 4 MANAGEMENT AGREEMENT as to the Authority Units will differ from those in effect with respect to public housing units owned by the MPHA. . The parties agree that, if experience demonstrates a need for or the desirability of further departures from standard procedures applicable to MPHA-owned public housing, they will consult with each other regarding such further modifications and will take such further implementing steps as they agree to be advisable, including, as appropriate, requests to HUD for revision or waiver of regulations necessary to permit the MPHA and City to undertake measures that enhance the long-term viability of the Development, or requests to implement statutory revisions made by Congress from time to time affecting either public housing in general or public housing located within privately-owned mixed-income communities in particular. 5.3. Tenant Selection. (a) The Agent will follow the resident selection policy described m the Management Plan. (b) With respect to the Authority Units, the MPHA shall create, maintain and manage one or more waiting lists in accordance with the Housing Covenants. When a vacancy will occur in an Authority Unit, the Agent shall request and the MPHA shall supply to the Agent the names of potentially eligible tenants for the Authority Units. Screening criteria and procedures employed by the Agent with respect to applicants for Authority Units shall, to the extent permissible under the Housing Covenants, be consistent with those utilized by the Agent with respect to other units in the Development; provided that at all times such procedures shall be fair and evenhanded and shall not be more stringent as they relate to other waiting list applicants. The MPHA shall have the right to monitor the procedures and results of the Agent's activities in this regard. The MPHA shall establish procedures for formal and informal review of eligibility or suitability determinations for applicants for admission to the Authority Units, consistent with HUD regulations. (c) Leases for the Authority Units will be on the form attached hereto as Exhibit C, subject to such changes as shall be approved in writing by the MPHA. (d) The Agent shall provide training for key management personnel, including attendance at conferences and seminars on housing management. The Agent will cooperate with the MPHA to facilitate resident awareness of and access to available social services. Such cooperation shall include keeping and displaying, on site or in the rental office, information concerning such services as is from time to time provided to the Agent by the MPHA. Training on public housing will be made available as needed by MPHA. 5 MANAGEMENT AGREEMENT 5.4. It is agreed that payments of Development Operating Subsidy from the MPHA shall be made directly to the Agent. In the event that the MPHA does not provide the Agent with the Development Operating Subsidy Requirement or the Development Operating Subsidy Requirement is inadequate to pay the difference between Authority Unit Income and Authority Unit Expenses, all as defined in Article IV of the MPHA Regulatory Agreement, the Agent shall utilize funds in the Development Operating Subsidy Reserve as described in Section 5.6 of the MPHA Regulatory Agreement. In the event the Development Operating Subsidy Reserve reaches the levels described in Sections 6.3 and 6.4 of the MPHA Regulatory Agreement, the Agent may exercise the remedies provided therein. 5.5. Taxes. (a) The parties hereto acknowledge that property taxes shall be paid by the Owner according to law. The Agent shall obtain statements for ad valorem property taxes and assessments against the Development and transmit copies thereof to the Owner promptly upon receipt thereof by the Agent. (b) Pursuant to Minnesota Statutes, §469.040, the Authority Units are exempt from property taxation and instead the Owner will be obligated to forward payments in lieu of taxes equal to five percent (5%) of "shelter rents," as defined therein. It shall be the duty of MPHA to annually certify to the appropriate assessing officials the number of Authority Units in the Development and the obligation of the Agent to calculate and provide to the Owner the amount of such payments in such a manner as to permit the timely payment thereof. (c) Notwithstanding anything in the preceding paragraphs of this Section 5.5 to the contrary, the Owner or Agent shall have the right at any time during the term of this Agreement to contest the amount of or assessment pertaining to real estate taxes, assessments, or any other imposition levied or imposed by any governmental authority concerning the Development. Section 6. Confer with Owner and the MHFA. Agent agrees to keep itself informed on the policies of the MHFA as they relate to compliance with the Low Income Housing Tax Credit Program, and, notwithstanding the authority given to the Agent in this Agreement, to confer fully and freely with the Owner, the marketing agent, if any, and the MHFA in the performance of its duties hereunder. Section 7. Meetings with Owner and Marketing Agent. The Agent agrees to cause an officer of the Agent to attend meetings with the Owner and marketing agent, if any, at any time or times requested by the Owner, marketing agent, or the MPHA. 6 MANAGEMENT AGREEMENT Section 8. Personnel Agent. 8.1. Employees of Agent. On the basis of wage rates previously approved by the Owner, the Agent shall investigate, hire, pay, supervise, and discharge all managerial and non-managerial personnel as follows: NO. POSITION TITLE ANNUAL PAYROLL INCLUDING WITHHOLDING 1 Manager Subject to Annual Budget 1 Maintenance Technician Subject to Annual Budget 1 Caretaker Subject to Annual Budget Such personnel shall in every instance be in the employment of the Agent. Compensation for the services of such employees (as evidenced by certified payrolls) shall be considered an operating expense of the Development. One (1) rent-free, two (2) bedroom apartment shall be provided for the subject personnel. The Agent shall hire in its own name, and have physically present at the Development, all managerial and non-managerial personnel necessary for the full and efficient performance of its duties under this agreement, including the physical presence of responsible personnel at such times as may reasonably be requested by the Owner. In any event, no less than one (1) responsible managerial or nonmanagerial person of the Agent shall be physically present at the Development not less than eight (8) hours per day, five (5) days per week. 8.2. Employment of Tenants and Contractors. To the greatest extent possible, opportunities for training and employment will be given to lower income Tenants residing in the Development, and contracts for work in connection with the Development will be awarded to business concerns which are located in or owned in substantial part by persons residing in the area of the Development. · Notwithstanding the above, these opportunities shall not compromise the quality of maintenance and management services or the financial condition of the Development. 8.3. On-Site Management. The Owner will provide and the Agent shall maintain an employee of the Agent to reside in the Development, which shall include such furniture, telephonic and other equipment, utilities and janitorial supplies as are reasonably necessary for the operation of the Development. Section 9. Services of Agent. 9.1. Annual Inspection. As part of a continuing program to secure full performance by the Tenants of all obligations and maintenance for which they are responsible, Agent shall make an annual inspection of all dwelling units and report its findings in writing to the Owner and the Public Agencies. 9.2. Maintenance and Repairs. Agent shall cause the buildings, appurtenances, 7 MANAGEMENT AGREEMENT equipment and grounds of the Development to be maintained and repaired according to standards acceptable to the Owner and the MPHA. 9.3. Preventive Maintenance. The Agent shall develop a preventive maintenance schedule including, but not limited to, periodic inspections of the units; residency commencement and termination checklists; inventory control; common area main- tenance; equipment maintenance; exterior maintenance on a seasonal basis; and painting, decorating, and replacement timetable, as necessary. 9.4. Property Insurance. In accordance with 9.3(viii), herein, the Agent shall obtain recommendations for, and cause to be placed in force, all forms of insurance needed to adequately protect the Owner and the Development (or as required by law), including, where appropriate, public liability insurance , boiler insurance, fire and extended coverage and burglary and theft insurance. All of the various types of insurance coverage required for the benefit of the Owner and the Development shall be placed with such companies, in such amounts, and with such beneficial interest appearing therein as shall be acceptable to the Owner and MPHA. 9.5. Notice of Authority. The Agent, in accordance with Minnesota Statutes § 504.22, shall place in conspicuous place on the premises a notice that the Agent is authorized to manage the premises and is authorized by the Owner to accept service of process and to receive and give receipt for notices and demands. 9.6. Service Requests of Tenants. The Agent shall maintain business-like relations with Tenants whose service requests shall be received, considered and recorded on a systematic, written basis in order to show the action taken with respect to each. Complaints of a serious nature and all written complaints shall, after thorough investigation, be reported to the Owner with appropriate recommendations. 8 MANAGEMENT AGREEMENT 9.7. Review of Operation. The Agent shall permit the Public Agencies to conduct on- site evaluations of the performance of any or all management services which the Agent has agreed to provide as stipulated in this Agreement, and the Management Plan, if required. An authorized representative of the Agent shall be available during on-site evaluations. The Public Agencies may render to the Owner and Agent written reports based on such evaluations. The Agent shall correct any deficiencies noted in these evaluations within 30 days of the receipt of the report from MPHA. In the event such correction cannot be made within 30 days, the Agent shall provide the Public Agencies with a written plan for such correction, including a timetable of proposed actions. 9.8. Collections and Delinquencies. The Agent shall collect and deposit in the account established pursuant to Section 11 hereof of all Rents and other charges due from Tenants and all Rents or other payments due the Owner from users of garage spaces and from users or lessees of other non-dwelling facilities in the Development. All payments· of Operating Subsidy made to the Development pursuant to the MPHA Regulatory Agreement shall be deposited by the Agent into such account. The Initial Deposit to the Authority Reserve shall be segregated and invested as set forth in Section 5.1 of the MPHA Regulatory Agreement. The Agent agrees, and the Owner hereby authorizes the Agent, to request, demand, collect, receive, and give receipts for any and all charges or rents which may at any time be or become payable to the Owner. Rents and other charges shall not be accepted in cash by the Agent. The Agent agrees to take such action, including legal action, with respect to delinquencies in payments due the Owner as the Owner may from time to time authorize. The Agent shall furnish the Owner an itemized list of all Tenants with a delinquent account immediately following the fifteenth day of each month. 9.9. Payments and Expenses. From the funds collected and deposited in the account established pursuant to Section 11. The Agent shall not make any disbursement in excess of $2,000.00 unless specifically authorized by the Owner; provided that emergency repairs, involving manifest danger to life and property, or immediately necessary for the preservation and safety of the Development, or for the safety of Tenants, or required to avoid the suspension of any necessary services to the Development, may be made by the Agent without regard to the cost limitation imposed by this paragraph with the understanding that the Agent will, if at all possible, confer immediately with the Owner regarding every such expenditure. The Agent shall not incur liabilities of the direct or contingent) which, in the aggregate will exceed at any time $2,000.00 unless specifically authorized by the Owner. 9 MANAGEMENT AGREEMENT In addition, the Agent shall not incur liabilities of the Owner (direct or contingent) which require payment more than one year from the creation thereof, unless specifically authorized by the Owner. 9.10. Government Orders. The Agent shall take such action as may be necessary to comply promptly with any and all orders or requirements affecting the Development which may be placed thereon by any federal, state, county, or municipal authority having jurisdiction hereover, and orders of the Board of Fire Underwriters or other similar bodies. The Agent shall not take any action under this paragraph so long as the Owner is contesting or has affirmed its intention to contest any such order or requirement. The Agent shall promptly, and in no event later than forty-eight (48) hours from the time of their receipt, notify the Owner in writing of all such orders and notices of requirements. 9.11. Utility Service and Purc hases. Subject to the approval of the Owner the Agent shall make contracts for garbage and trash removal, fuel, oil, extermination, snow removal, elevator maintenance, and other necessary services. Further, the Agent shall place orders for such equipment, tools, appliances, materials, and supplies as are necessary to maintain and repair the Development properly. When taking bids or issuing purchase orders, the Agent shall act at all times in the best interests of the Owner and shall be under a duty to secure for and credit to the Owner any discounts, commissions or rebates obtainable as a result of such purchases. 9.12. Records and Reports. (a) The Agent shall establish and maintain a comprehensive system of records, books, and accounts in a manner satisfactory to the Owner and the Public Agencies. All records books, and accounts will be subject to examination at reasonable hours by any authorized representative of the Owner or the MPHA. (b) With respect to each fiscal year ending during the term of this Agreement, the Agent will have an annual financial report prepared by a Certified Public Accountant based upon the preparer's examination of the books and records of the Owner and the Agent. The report will be prepared in accordance with the requirements of the Public Agencies, will be certified by the preparer and the Agent, and will be submitted to the Owner within sixty (60) days after the end of the fiscal year, for the Owner's further certification and submission to the Public Agencies. Compensation for the preparer's services will be considered an operating expense of the Development. (c) The Agent will prepare a Monthly Operating Report which compares actual and budgeted income and expenses for the month and for the "year- to-date". The Agent will prepare a monthly aged schedule of accounts 10 MANAGEMENT AGREEMENT receivable and accounts payable and a monthly occupancy report. The Agent will prepare a monthly analysis of security deposits and monthly cash reconciliation, and will submit each statement to the Owner within fifteen (15) days after the end of the month covered. (d) The Agent will furnish such information as may be requested by the Owner or the MPHA from time to time with respect to the financial, physical, or operational condition of the Development. (e) By the fifteenth (15th) day of each month, the Agent will furnish the Owner with an itemized list of all rent delinquencies as of the tenth (10th) day of the same month. (f) The Agent shall prepare, execute, and file for the Owner all forms, reports, and returns required by law in connection with the employment of personnel, including unemployment insurance, worker's compensation insurance, disability benefits, social security, and other similar insurance benefits or taxes now in effect or hereafter imposed. (g) All records, books, and accounts will be subject to examination at reasonable hours by any authorized representative of the MPHA, HUD and City. The Agent shall be responsible for providing the budgets and reports described _in Article IV of the MPHA Regulatory Agreement. The Agent must submit periodic occupancy data as required by HUD on HUD forms 50058 and 51234. 9.13. Operating Budget. At least 60 days before the beginning of each new fiscal year for the Development, the Agent shall prepare and submit to the Owner, the MPHA, an Operating Budget, setting forth an itemized statement of the anticipated receipts and disbursements for the Development. In addition, the Agent shall prepare and submit to the MPHA the initial estimated and subsequent operating budgets for the Authority Units pursuant to Article IV of the MPHA Regulatory Agreement and shall provide such other information and reports as required by the Owner, the MPHA or the City. 9.14. Assumption of Marketing Duties. Upon expiration or termination of the Marketing Agreement (attached hereto as Exhibit D), the Agent shall immediately assume responsibility for all functions and services of the marketing agent as set forth in the agreement. 9.15. Compliance of Tenants. (a) The Agent shall at all times during the term of this Agreement operate and maintain the Development according to the provisions of Section 42 and any regulations thereunder, and by the Owner's covenants to the MHFA 11 MANAGEMENT AGREEMENT relating to the Low Income Housing Tax Credit Program. The Agent shall secure full compliance by the Tenants with the terms and conditions of their respective Leases and with the provisions of the LIHC Program. (b) Voluntary compliance shall be emphasized, and the Agent shall counsel Tenants and make referrals to social service agencies in cases of financial hardship or under other circumstances deemed appropriate by the Agent, so that involuntary termination of tenancies may be avoided to the maximum extent consistent with sound management of the Development. The Agent will not, however tolerate willful evasion of payment of rent. (c) The Agent may lawfully terminate any tenancy when, in the Agent's judgment, sufficient cause occurs under the terms of the Tenant's Lease. Documentation of eviction for reasons other than non-payment of Rent will be on file with the Owner. (d) The Agent is authorized to consult with legal counsel designated by the Owner to bring actions for eviction and to execute notices to vacate and to commence appropriate judicial proceedings; provided, however, that the Agent shall keep the Owner informed of such actions and shall follow such instructions as the Owner have prescribed. (e) Subject to the Owner's approval, costs incurred in connection with such actions shall be considered as operating expenses. (f) With regard to the Authority Units, the City, with the cooperation of the MPHA, will establish a tenant grievance procedure for residents of the Authority Units in compliance with the requirements of Section 6(k) of the MPHA Act and consistent, to the maximum extent feasible, with the intent stated in Section 5.2, above. Such procedures will provide for informal discussion and settlement of grievances by the Agent and hearing before a formal hearing panel appointed in accordance with such grievance procedures. The MPHA and City will seek HUD approval, to the extent required, of variations from the requirements of 24 CFR Part 966, Subpart B, as amended or replaced from time to time. 9.16. Certification and Recertification Income. Prior to move-in and at least annually thereafter, the Agent shall certify/recertify incomes of Tenants, as required by the Housing Covenants and the LIHC Program and the MHFA. Tenant incomes must be in compliance with Section 42 and the MPHA Act, and any subsidy contract for the Development. 9.17. Gross Rent. For purposes of the LIHC Program, gross rent is determined by adding Rent plus the applicable utility allowance. Agent shall ensure that gross rent is in compliance with the LIHC Program and, with respect to the Authority Units, the Housing Covenants. 12 MANAGEMENT AGREEMENT 9.18. Compliance with Section 42. (a) Agent, property managers/supervisors and on-site office staff appointed or assigned to the Development and all site personnel shall carefully review and become familiar with all regulatory requirements promulgated under the LIHC Program. The aforementioned personnel (hereinafter referred to as "Staff') shall attend LIHC compliance training as soon as is practicable. At least once every 2 years thereafter, Staff must attend seminars, ·conference and/or workshops on the LIHC Program to ensure continued knowledge of and compliance with Section 42, as may be periodically amended by the Treasury Department or Internal Revenue Service (IRS). Agent shall ensure that the Development is operated and managed in compliance with all of the foregoing; cooperate with the IRS and other governmental authorities in connection therewith; and inform Owner of any such information which may subsequently become available, which may be material to the operation and management of the Development and/or Owner's investment therein. (b) Owner will provide Agent with copies of the following documents in a timely manner: (1) MHFA LIHC Compliance Manual, (3) Section 42 rent and income tables, (4) utility allowance schedules from the appropriate utility source. Owner further agrees to provide Agent with amendments, changes, rulings and announcements to the aforementioned documents, as they occur. Agent agrees to provide copies of documents for Staff as defined in this Section 9.24. Current copies are to be maintained at the Development for the duration of the compliance period required by the LIHC Program. (c) Agent will provide MHFA with a copy of all Tenant file documentation for any and all Tenants that occupied a unit in the Development from January 1 through December 31 through the end of the compliance period as indicated in the Land Use Restriction Agreement. Such documentation will be submitted to MHFA within sixty (60) days of said December 31 date. (d) Agent will immediately report to MHFA any and all noncompliance of which it becomes aware and will take prompt action to correct any noncompliance. Section 10. Other Acts. Everything done by the Agent under the provisions of this Agreement shall be done as agent of the Owner, and all obligations or expenses incurred thereunder shall be for the account of and on behalf of the Owner. Any payments to be made by the Agent hereunder shall be made out of such sums as are available in the Operating Receipts 13 MANAGEMENT AGREEMENT and Expense Account established pursuant to Section 11, below. The Agent shall not be obliged to make any advance to, or for the account of the Owner without assurance that the necessary funds for the discharge thereof will be provided. Section 11. Bank Account. 11.1. The Agent shall establish and maintain, in a bank whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC), a separate bank account as Agent of the Owner for the deposit of the moneys of the Owner, with authority to draw thereon for any payments to be made by the Agent to discharge any liabilities or obligations of the Owner incurred in accordance with this Agreement. This account shall be carried in the Agent's name and shall be designated of record Silver Lake Commons Operating Receipts and Expense Account". The Agent shall establish such other special bank accounts as may be required by the Owner, or the MPHA Regulatory Agreement. Signatories entitled to make withdrawals from any and all of these accounts shall be persons covered by the Bond to be posted pursuant to Section 15 of this Agreement. 11.2. Security Deposit Account. The Agent shall collect, deposit, and disburse Tenant's security deposits in accordance with the terms of the respective Leases. Tenant's security deposits shall be deposited by the Agent in an interest bearing account, separate from all other accounts and funds, with a bank or other financial institution whose deposits are insured by the FDIC. The Agent shall be responsible for any loss incurred by the Development for its failure to comply with refunding of security deposits with accrued interest to Tenants as required by Minnesota Laws, 1973, Chapter 561. This account shall be carried in the Agent's name and shall be designated of record "Silver Lake Commons Security Deposit Account". The Agent shall cause the amount of the Security Deposit Account to equal or exceed at all times the aggregate of all outstanding obligations by the Owner with respect to security deposits. Section 12. Office Development. The Owner shall furnish the Agent with suitable office space, office furniture and equipment (file, typewriter, adding machine, etc.) on the site of the Development and with electricity, heat, water, and janitorial service therein. Section 13. Compensation of Agent. Management Agent will be compensated for it's services under this agreement by monthly fees, to be paid out of the Operating Receipts and Expense Account established pursuant to section 11, hereof which will be treated as operating expenses. Each monthly fee will be in an amount specified in the most current annual operating budget that has been submitted to and approved, in writing by the Owner, and shall be payable on the first of each month. The Agent will not receive compensation for any rented apartment where the rent has not been paid, provided that this fee is paid in a subsequent month when the rent is collected. Such fees shall be computed and paid monthly based upon the preceding month's paid rented apartments. 14 MANAGEMENT AGREEMENT All supervisory, bookkeeping-accounting, clerical, along with all of the Agent's off-site overhead expenses (including but not limited to costs of office supplies, photocopying, the fidelity bond, staff training, postage, stationery, transportation, and telephone expenses, other than management-related long distance calls) will be borne by the Agent out of its own funds and will not be treated as an operating expense of the Development. Section 14. Non-Discrimination. 14.1. In the performance of its obligations under this Agreement, the Agent will comply with the provisions of any federal, state, or local law prohibiting discrimination in housing on the grounds of race, color, sex, creed, religion marital status, physical or mental disability, economic status, or national origin, including Title VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241), all requirements imposed by or pursuant to the regulations issued pursuant to the regulations issued pursuant to Executive Order 11063, and Title VII of the 1968 Civil Rights Act. This Agreement may be terminated or suspended in whole or in part, by the Owner upon the basis of a finding by Owner that the Agent has not complied with non- discrimination provisions. 14.2. The Agent shall comply with the "Residential Selection Plan" for the Development (attached hereto as Exhibit F). Section 1S. Fidelity Bond. The Agent shall furnish, at its own expense, a fidelity bond to protect the Owner against misapplication of funds of the Development by the Agent and its employees. The terms and conditions of the bond, and the surety thereon, shall also be subject to the approval of the Owner and shall be in an amount not less than two (2) times the total of the following: (a) The maximum possible monthly Rent collections based on 100% occupancy as set forth in the annual budget referred to in Section 9.19, herein; and, (b) Monthly Non-Housing Income as defined in Section 1.16; and (c) The maximum possible funds being held as security deposits based on 100% occupancy. 15 MANAGEMENT AGREEMENT Section 16. Expiration and Termination. 16.1. Expiration and Termination: Unless sooner canceled pursuant to Sections 16.2, 16.3, 16.4 or 16.5 of this Section, this Agreement shall be effective on the date hereof and shall be extended automatically for successive periods of one (1) year unless either the Owner or the Managing Agent provide written notice ninety (90) days prior to expiration of then-current term indicating their intention to have this Agreement terminate. This Agreement shall not be deemed complete unless and until this Agreement has been approved in writing by the Public Agencies. 16.2. Termination by Mutual Consent. This Agreement may be terminated by the mutual written consent of the Owner and the Agent only with the prior written consent of , the MPHA and the City. 16.3. Termination by Owner for Cause. In the event that the Agent shall fail to perform any of its duties hereunder or comply with any of the provisions hereof, the Owner may terminate this Agreement for cause upon Owner's thirty (30) days written notice to the Agent. 16.4. Termination Because of Bankruptcy. In the event that a petition in bankruptcy is filed by or against either the Owner or the Agent, or in the event that either shall make as assignment for the benefit of creditors to take advantage of any insolvency act, either party hereto may immediately terminate this Agreement without notice, but prompt advice of such action shall be given to the other party. 16.5. Termination by MPHA. In the event the MPHA determines that the Agent has violated, breached, or failed to comply with a provision of, or obligation under, the Housing Covenants, it shall so notify the Owner in writing and the Owner shall immediately so notify the Agent and this Agreement shall terminate within thirty (30) days of receipt by the Agent of such notification. 16 MANAGEMENT AGREEMENT 16.6. Accounting Upon Termination. Within IO days after the termination of this Agreement, the Owner and Agent shall account to each other with respect to all matters outstanding as of the date of termination. The Owner shall furnish the Agent security against any outstanding obligations or liabilities which the Agent may have incurred hereunder, and the Agent shall turn over to the Owner all Tenant files, records, documents or other instruments, waiting lists, and any and all other files and papers 'in its possession pertaining to the Agent's performance under this Agreement. Section 17. Assignments. This Agreement shall inure to the benefit of and constitute a binding obligation upon the Owner and Agent, and their respective successors and assigns, provided that the Agent cannot assign this Agreement or any of its duties hereunder without the prior written consent of the Owner and the MPHA. Section 18. Amendment. This Agreement constitutes the entire Agreement between the Owner and the Agent, and no amendment or modification thereof shall be valid and enforceable except by supplemental agreement in writing, executed, and approved in the same manner as this Agreement. Section 19. Execution of Counterparts. For the convenience of the parties, this Agreement has been executed in counterpart copies, which are in all respects similar and each of which shall be deemed to be complete in itself so that any one may be introduced in evidence or used for any other purpose without the production of the other counterparts. Section 20. Address for Notices. Whenever any approval or notice on behalf of the Owner or Agent is required under this Agreement, said notice shall be deemed to have been given when mailed by certified mail at the following addresses: Owner: Attention: Agent: 17 MANAGEMENT AGREEMENT MPHA: Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Attention: Executive Director City: City of Mounds View 2401 Highway 10 Mounds View, Minnesota 55112-1499 Attention: Community Development Director MANAGEMENT AGREEMENT EXECUTION PAGE IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year immediately below their respective signatures. OWNER: By: AGENT: MANAGEMENT AGREEMENT EXECUTION PAGE The Public Agencies hereby approve and consent to the foregoing Agreement and the Agent appointed therein. MPHA: MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FO HE CITY OF MINNEAPOLIS And by_ --b L..-.C........::"'-<,-J'---'""-------'- """--- - --=-- ,;i11--- Cora Mccorvey Its Executive Director DATE: _ ---+-+- l _3J-t-- )v o...s.....= - CITY: CITY OF MOUNDS VIEW, MINNESOTA By: __________________________________________ Carol A. Mueller, Mayor _________________________________ By: Nyle Zikmund, Interim City Administrator Date: ___________________ DATE: EXHIBITC MHOP 10 Units Lease 2 MANAGEMENT PLAN Section I: Owner-Manager Relationship A. The Owner of the Development is ______, of which _____ is the General Partner. ____ is the managing Agent for the Development. B. The Owner reserves the right to formulate all policies, procedures and regulations. The actual implementation of the Owner's Policies will be coordinated by the Agent. The Agent will report to the Owner on a monthly basis concerning all aspects of the operation. The Agent will be responsible for the day-to-day operation of the Development, including supervision of the employees. The Agent will make, at least, monthly visits to the site. C. The Agent must consult the Owner before deviating from set policies, or for any charges or any expenditures which are beyond the normal budget as defined with the Management Agreement. D. The Agent may make decisions without consulting the Owner for the operation of the Development as outlined in the Management Plan and the Management Agreement. E. _______ is the representative of the partnership, who will have the decision- making authority. F. The responsibilities of the Agent are outlined in the Management Agreement. The Owner is responsible for determining the house rules, policies and regulations to be imposed. The implementation of the Owner's policies will be coordinated by the Agent. The Management Agreement and annual budget make clear which items of expenses are to be paid for by the managing Agent out of its fee and which expenses are to be paid out of rental income from the Development. G. For purposes of this plan, reference to "The Property" shall refer to Silver Lake Commons Apartments and Townhomes. Section II: Human Resources The staff of Silver Lake Commons has well-defined job responsibilities. Site staff includes: The Business Manager of the property is responsible for the overall daily operations of the properties; such as rent collections, resident retention/relations, employee relations, tax credit certification/recertification, dealing with vendors, community involvement, purchasing and budget control, etc. Currently the Maintenance Technician is responsible for doing day-to-day routine maintenance calls. Residents contact the site office to submit work orders (please see operations plan on further details on maintenance requests). 3 In general, the Property is developing a staffing structure with an eye on the long term management of the properties. This is being done by encouraging a team work atmosphere, as well as the longevity of employment of our maintenance personnel and the strengthening of the Business Manager's skills. Section III: Marketing See separate Marketing Plan. Section IV: Management Policies Leasing Policies The leasing policies conform with standard industry practice for Low Income Housing Tax Credit and are outlined in the attached Resident Selection Plan. (Copy attached, Exhibit A). Each applicant must income qualify under the median income limits for the tax credit housing programs. A MHOP applicant must have income within the HUD published income limits. We do a complete criminal, credit and previous rental history background check on each applicant before they are accepted into the Property. Each applicant (excluding MHOP units) is charged a $35.00 application fee to help offset the cost of processing applications. A Security Deposit of $300- $500 will be charged for each apartment, subject to market concessions. A. All leases will be in writing for a term of one year. The lease will renew annually unless a written notice of intent to vacate has been received a full calendar month plus one day in advance of the termination date. The lease will be signed prior to move -in by all adult members of the household. Each resident will sign a receipt acknowledging that they received a copy of their lease. B. The Agent is knowledgeable of required and prohibited lease clauses and state lease laws. C. The Resident Handbook will be provided to each Resident as an attachment to their lease. Waiting List Once the Property has attained maximum occupancy, leasing will be accomplished through the utilization of waiting lists. When an applicant expresses interest in moving into the property, their name, telephone number and address is placed on a waiting list for the next available unit that conforms with their unit size needs. When an apartment becomes available, we contact all applicants who are on the waiting list. Appointments are scheduled at varying times (mornings, afternoons, evenings) in order to insure that all prospects have the opportunity to view available units. Office Hours The scheduled office hours vary depending on residents' needs and management staffs schedules . 4 Pet Policy The Property has a one-dog less than 25 pounds policy with the exception of companion animals needed for disabled residents. The Property will consider cats on a case-by-case basis. Occupancy Occupancy standards are as follows: I-Bedroom I -2 People 2-Bedroom 3-4 People 3-Bedroom 5 -6 People 4-Bedroom 7-8 People The MPHA occupancy standards will be used for the MHOP units . Section V: Resident Retention Program We believe that good resident relations begin when a prospect visits our property and continues throughout the tenancy of each resident. Our objective is to create a warm and inviting atmosphere for our residents, a feeling of home and a sense of community. We treat our residents with the utmost respect and will not tolerate disrespect. We show residents our appreciation for them in the following ways: I. A clean and well-cared for apartment community which is the first sign to residents that they are appreciated. 2. Even in a distressed neighborhood residents can enjoy living in a cheerful environment. We encourage planting an extensive variety of plants and flowers to improve curb appeal. 3. Each member of our staff must promote good resident relations. 4. The answering service is considered another member of our staff. We have set high standards in the way our calls are answered and messages forwarded. 5. The condition of the apartment on move-in day must be immaculate. 6. A move-in packet is given to each new resident on move-in day. An orientation session is set up prior to move-in to review policies, rules and regulations. 7. The Business Manager calls each new resident within the first 50 days of the resident's occupancy to check on their satisfaction with their new apartments. 8. Resident activities are meant to foster a sense of community. Pot luck dinners, holiday parties, etc. are encouraged. 5 Section VI: Operations Plan Operations Budget The budget is an estimated summary of income and expenses for one calendar year. Our objective is to achieve or exceed the NOI goals every month. Rent Collection Policy and Procedures We have initiated a consistent and professional rent collection policy and procedure which is implemented by the Business Manager. Rent must be paid by personal check, certified check or money order. NO CASH IS ACCEPTED. Rents will be payable on or before the first day of every month. Reminder Notices are sent to residents on the 6°' day of each month. Personal contact is made on the 7th day of each month. Final Late Notices are delivered on the 9th day of each month, and Unlawful Detainers are filed on the 10th day of each month. Note: A late fee charge of $25.00 is assessed to each resident who has not delivered rent by 5:00 p.m. on the 6th day of each month. Rents will either be deposited in a rent collection box at the site, or mailed in pre-addressed envelopes to the Agent. Rent collection is the responsibility of the Agent. Rent payments will be collected by the Agent and an accurate record kept of the payments. All rents and other receipts shall be deposited in a rental account in a bank whose deposits are insured by the FDIC. A security deposit will be required that will not exceed one-months rent. All funds collected as security deposits shall be kept in a separate identifiable account in compliance with state law. A list of residents who currently have a security deposit in the account will be kept on file. Interest earned on the security deposits will be paid in accordance to the state laws. NSF Fees Residents are delivered a NSF letter the same day the NSF Check is received. All future rents must be paid by cashiers check or money order unless we receive written verification from the bank that the NSF check was a bank error. Bank Deposits Rent checks are processed on a daily basis. As checks come in we immediately verify that all information is correct and all charges are paid in full. The checks are then endorsed and deposited daily. Rent Increases Typically, rent increases are planned when the annual operating budget is prepared. The lease requires a 60-day notice, therefore, we prepare rent increase letters to be delivered 75 days in advance. 6 Purchasing The property has a budget that is prepared for the calendar year. It is the Business Manager's responsibility to control costs so that expenses remain at or below budgeted amounts. Expenses exceeding budget must be approved by the Property Manager. Purchase Orders are utilized on this property to ensure that only authorized employees may make purchases. The purchase order defines exactly what is being purchased and documents the price and orders. Purchase Orders help to maintain inventory control. Recordkeeping and Reporting Requirements A. Resident and operating accounts are to be prepared and maintained by Agent. B. The Agent will be responsible for the preparation and submission of the monthly operating report, annual budget and unaudited financial statements. C. A separate file will be maintained for each resident. All relevant information pertaining to that individual will be included in the file. This information will be retained for a period of three years after the resident vacates the unit. The Agent will be responsible for maintaining these records. Procedures for Determining Resident Eligibility and for Certifying and Recertifying Incomes A. A separate file will be maintained for each resident. Included in each file will be the initial application, preapplication, annual inspection sheets, income verification forms, lease agreement, move-in and move-out reports and all correspondence and notices to the resident. B. The Agent will be responsible for determining Resident eligibility and for certifying and recertifying incomes. Maintenance and Repairs Program The goal of our maintenance program is to preserve the property while providing for the safety and well-being of the residents. We make every effort to handle maintenance request within 24 hours. A written work order system is utilized which allow for accurate tracking and follow-up of all maintenance calls. Office staff will follow-up by contracting 75% of residents requesting work orders to ensure appropriate completion of the task.\ Maintaining inventory for the maintenance department is the responsibility of the Maintenance Technician. We maintain a sufficient quantity of supplies and repair parts to get through a one- month period. Grounds keeping and parking lot snow removal will be contracted. A property inspection/office audit is conducted quarterly to insure that the property is maintained appropriately. Each inspection/audit is scored and is utilized in staff performance reviews. A. The Development's "as built" plans and specifications will be located at the site office. 7 B. Prior to move-out, an inspection will be made by the Business Manager and resident of the rental unit. All necessary repairs and clean-up work will be noted on the Unit Inspection Report and charged to the resident, beyond ordinary wear and tear. Prior to move=-in or by the 1st day of the month, the apartment will be checked to verify completion of the necessary work. C. Painting interior areas and exterior areas will be initiated as soon as the need is apparent and will then be maintained on a continuous basis so that some work is done each year and the Development will always be maintained in an acceptable manner. If feasible the Maintenance Technician will be responsible for the painting. Exterior painting of areas above the first floor will be done on a contract basis. D. Pick up of garbage and recycling is on a regular schedule, and the residents will be advised of the schedule. E. If repairs over the spending limit of $1,000 are required, 3 bids for the work will be solicited. After obtaining Owner approval, the contract or job will be awarded to the competitive vendor that management believes to be most qualified. Bids over the spending limit must be approved by the Owner. F. The sidewalk surrounding the building will be kept clear of snow and ice in the winter, and swept as needed during the rest of the year. The lawn, trees, shrubs and landscaping will be cut, trimmed, fertilized and watered as necessary. Snow removal on sidewalks will be done by site staff. G. All common areas such as parking lots will be cleaned periodically, and kept free of trash and other debris by the Maintenance Technician. H. Residents will be informed at move-in of the need to report any maintenance problems within their units directly to the Manager, who will record the request on the appropriate form. The Manager will then decide if the repair can be made by the site staff. If outside help is needed, the Manager will call on local subcontractors. I. Smoke alarms will be tested annually in each apartment and in common areas. Fire extinguishers shall be provided as required by state and city code and serviced annually. J. Heating equipment will be serviced by a trained service representative on a bi-annual (every two years) basis. A yearly inspection of the total Development will be made for the purpose of an annual maintenance report. Maintenance and service repair contracts will be made by the Manager. The Agent shall be responsible for monitoring the implementation of the preventative maintenance plans. On-Going Training A. New employees receive a one to three-day training/orientation program. Continued training is conducted as on-the-job training. The Property Manager and Business Manager periodically accompany the Maintenance Technician during service calls in order to identify additional training needs. 8 • I B. In addition to our in-house training, additional training is accomplished through outside sources such as the Minnesota Multi Housing Association. Section VII: Energy Conservation Measures A. We will encourage the residents to directly control the conservation of energy in the following areas: use in air conditioning; timing of the use of hot water to coincide with off-peak periods; regulation of the thermostats; window infiltration, i.e. application of insulated shade or other window treatments; lighting needs in the individual units; and heat loss caused by opening windows for ventilation. These conservation practices will affect the use of electricity and natural gas. B. Management will have direct control over energy conservation practices such as lighting used in the common areas, and timing of consumption. Utility to be affected is electricity. C. Energy conservation practices to be implemented by management include installation of fluorescent fixtures to reduce the use of electricity, use of time clocks or photo-electric eyes to regulate consumption, and a continuing investigation of existing and new me5hods of energy conservation to determine the applicability of these methods to the Development. D. To stimulate energy conservation, the Agent will provide a periodic program of education in energy use for the resident. This will be through group session and/or periodic newsletters. E. Residents will be oriented to energy conservation measures upon moving into the Development by means of orientation session outlining ways they can reduce energy and thus reduce overall operating costs. F. Energy conservation measures identified in an energy audit will be carried out by the Agent as soon as feasibly possible after identification. Section VII: Security Servicing A. Knowledge of requirements for Fidelity Bond Coverage and insurance are the responsibility of the Agent. B. Criminal background checks will be conducted on any employee with access to master and/or unit keys. C. Cash will not be kept on site. D. Vacant units will be inspected by the Property Manager monthly.