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Resolution 4673 - Acceptance of CDBG Grant Funds - 2nd Avenue West Housing Project41 RESOLUTION NO. 4673 A RESOLUTION AUTHORIZING ACCEPTANCE OF MONTANA DEPARTMENT OF COMMERCE COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS IN THE AMOUNT OF $500,000 FOR THE SECOND AVENUE WEST SENIOR HOUSING PROJECT; ESTABLISHING A $500,000 BUDGET TO BE FUNDED WITH THE AWARD; ADOPTION OF A MANAGEMENT PLAN FOR THE PROJECT; ADOPTION OF A PROGRAM INCOME PLAN FOR THE PROJECT; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City of Kalispell has received a Montana Department of Commerce Community Development Block Grant to provide funds for the Second Avenue West Senior Housing project in the amount of $500,000; and WHEREAS, a contract between the Montana Department of Commerce and the City is currently being drawn up by Community Development Block Grant staff and will need to be ratified after certain other requirements are fulfilled; and WHEREAS, implementation of the Grant requires that a budget must be established for use of the Grant funds, and a Project Management Plan and a Program Income Plan must be adopted; and WHEREAS, funds from the Grant cannot be utilized until the contract is ratified. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION I. That the City of Kalispell agrees to accept the grant award in the amount of $500,000 from CDBG for the Second Avenue West Senior Housing Project. SECTION II. That a budget be established in the amount of $500,000 for use of the Grant Funds. SECTION III. That the Project Management Plan and Program Income Plan, attached hereto, be officially adopted. SECTION IV. This Resolution shall become effective immediately upon its passage by the City Council. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR THIS 3RD DAY OF DECEMBER, 2001. Wm.bohar5kl .� � Wm E. Boharski ATTEST: Mayor Theresa White City Clerk 42 PROGRAM INCOME PLAN Use of Past Progam Income The City of Kalispell has received no Program Income from either CDBG during the years 1998, 1999, 2000 or 2001. The First Time Home Buyer Program that created two subdivisions and 49 units has the recaptured subsidy being returned to the Glacier Affordable Housing Foundation for reinvestment (recycling) within the city limits for future assistance to other low and very low income residents. Samaritan House received a CDBG grant award in 1997 and has had no income generated from the project. Plan for Future Use of Program Income The City of Kalispell will be the recipient of principal and interest from the CDBG grant funds loaned to the 2"d Avenue West Partners, L.P. Appendix I in the 2001 CDBG Housing and Neighborhood Revitalization Grant Application is a Non -Negotiable, Non -Recourse Promissory Note that will be entered into between 2"d Avenue West Partners, L.P., a Montana limited partnership, and the City of Kalispell. (iii) Repayment. Annual interest payments shall be made on or before the last day of each taxable year as follows: during the term of the Loan, an annual interest payment of 1% shall be payable to the extent that Surplus Cash is sufficient for the payment thereof. To the extent that Surplus Cash is not sufficient for the payment of Interest, the unpaid Interest shall accrue until paid in accordance with the terms hereof. Payments of principal shall not be required until maturity of the Loan; however, prepayment of all or any portion'of principal may be made at any time without penalty. A balloon payment sufficient to pay the entire outstanding indebtedness of principal, interest and accrued interest shall be made at maturity of the Loan. Any Program Income generated off this project will be used solely for CDBG eligible activities and administered under the long standing policy and procedures currently in place. 1 1 200I CDBG Housing & Neighborhood Revitalization Grant Application Page 1 of 2 City of Kalispell 43 1 1 1 Report On Use Of Past Program Income For The City Of Kalispell, MT Receipts, Disbursements and Changes in Fund Balance(s) For the Last 3 Fiscal Years Ending June 30, 2001 FY 1999 FY 2000 FY 2001 (Receipts) Interest -0- -0- -0- Principal -0- -0- -0- Other -0- -0- -0- Total Annual Recei is -0- -0- -0- (Disbursements) Loans -0- -0- -0- Grants -0- -0- -0- Total Annual Disbursements -0- -0- -0_ Fund Salauce s -0- -0- -0- Note: Attach the following: Not Applicable A description of the sources for program income, including interest earned. Dates and amounts of program income deposits and disbursements. A description of the activities funded with program income. 2001 CDHG Housing & Neighborhood Revitalization Grant Application City of Kalispell Page 2 of 2 M MANAGEMENT PLAN FOR THE CITY OF KALISPELL SECOND AVENUE WEST SENIOR HOUSING PROJECT Entities Committed To The Management Plan The City of Kalispell, hereinafter referred to as "the City" United Way of Flathead County, Inc., hereinafter referred to as "United Way" 2"d Avenue West Partners, L.P., hereinafter referred to as The L.P. Hampstead Partners, Inc., hereinafter referred to as HP I. PURPOSE: The purpose of the Management Plan is to describe the administrative structure, the program management, staffing and contracted .services, project schedule and the financial management required to undertake and complete the construction and occupancy of a 40-unit senior housing low-income rental complex referred to as "The Project" to be constructed at 121 Second Avenue West, Kalispell, MT. In addition, this Management Plan describes the function of United Way as a co�-general partner in 2"d Avenue West Partners, L.P. in the management of funds generated from The Project and to facilitate provision of services to low and moderate income seniors residing in The Project. The Plan is designed to assure compliance with all applicable CDBG, HOME, and all other applicable federal, state and local regulations. . H. NON-DISCREVQNATION: It is the policy of The City, United Way, The L.P. and HP to provide equal opportunity to all of its employees and applicants for employment, contractors and bidding pr proposing contractors, and service recipients and to assure that there shall be no discrimination against any person on the basis of race, color, religion, creed, national origin, sex, age, physical or mental handicao, sexual preference, marital status or political beliefs unless related to a bona fide occupational requirement. To this end, The City, United Way The L.P. and HP will take affirmative actions to equalize opportunity at all levels of operation for those classes of people who have traditionally been denied equal opportunity — minority group members, women, and the handicapped;. and The City, United Way, The L.P. and HP recognize an obligation to make reasonable accommodations to the known physical or mental limitations of an otherwise qualified handicapped applicant or employee unless the accommodation imposes -an undue hardship. III. INTEGRATION OF PROGRAM MANAGEMENT: The project is a joint effort of The City, United Way, HP and The LP (which will be amended to include United Way as a co -general partner following the execution of the CDBG and HOME Grant contracts.) The Project Management Plan will be incorporated into the overall City of Kalispell' organizational 2001 CDBG Housing & Neighborhood Revitalization Application Page 1 of 16 City of Kalispell policies and procedures by Resolution upon award of the CDBG and HOME Grants. The current personnel, fiscal, and other general policies and procedures of The City and The L.P. govern, as applicable, the management and operation of the project. If there is ever a conflict between the City, United Way, The L.P. or HP,- policies and procedures governing the project, the applicable policies and procedures will be the City's. The City is an incorporated city with a City Manager/Council farm of government. An Interlocal Subrecipient Agreement has been entered into between the City and United Way. Attachment C. The City will be responsible for all aspects of grant management. Specific responsibilities regarding design and construction of The Project are outlined in the Agreement of Commitment and the Memorandum of Understanding, dated August 24, 2001 between the City and The L.P. as evidenced by Attachments A and B to this. Management Plan. Once the construction of The Project has been completed, The L.P. will be responsible for the lease -up and on -going maintenance and management of The Project. The City will execute a Deed Restriction with The L.P. restricting the use of the property as low-income rental housing and specifying continued compliance with all applicable CDBG/HOME and City regulations for a period of thirty-five years. THE CITY OF KALISPELL The following staffing and contracted services plan not only delineates the major responsibilities of all city personnel involved in The Project but for the other entities as well. Attendance at the CDBG and HOME Administration Workshops will involve, at a minimum, the Project Manager and the Project Coordinator from the Community Development Department. The attendance of limited city personnel is sufficient due to the twenty-three history of successful administration of federal and state grants, especially CDBG and HOME Grants. City Manager Chris A. Kukulski 406 758-7703 As the City's official administrator, the City Manager will have the responsibilities for all official contacts with the Montana Department of Commerce (MDOC). The City Manager and the City Council will have the ultimate responsibility for the management of project activities and expenditures of. CDBG and HOME funds. - The final approval of all contracts and draw down requests will be the responsibility of the City Council. Finance Director. AM Robertson (406) 758-7755. As the City's chief financial officer, the Finance Director will be responsible for the management of, and recording keeping, for the CDBG and HOME funds, as well as all other City funds involved in financing the'Project. City AttorneL Glen Neier 406 758-7709 As the City's legal counsel, the City Attorney will review and advise the City Manager and Council regarding any proposed contractual agreement associated with the CDBG and HOME Project, including agreements between all parties and the City, and will provide any other legal guidance as necessary. 2001 CDBG Housing & Neighborhood Revitalization Application Page 2 of 16 City of Kalispell Environmental Certifying Officer, Thomas R. Jentz (406)751-1851 The Tri-City Planning Director, Thomas R. Jentz, has been designated as the Environmental Certifying Officer by Resolution No. 4646, effective August 6, 2001. The Environmental Certifying Officer will: • Prepare the Environmental Review Record. (ERR) to assure full compliance with the National and Montana Environmental Policy Acts, complete the statutory checklist, and any other environmental requirements. • Prepare any legal notices required to be published for the ERR process and conduct any required public hearing or informational meetings. • Secure State Historic Preservation Office clearance if applicable. • Prepare a Request for Release of Funds (RROF) to MDOC Community Dgvelo ment Director Susan Moyer 406 758-7743 The Director will review and approve all claims and draw down requests prepared by the Project Manager. Until such time as the City hires a permanent Community Development Manager, the Director will share the duties of Project Manager with Lynn Moon, Consultant, as needed. The Project Manager Lynn Moon, Consultant, (406) 758-7741 will perform the duties of Project Manager until June 30, 2002. After June 30, 2002, the City anticipates a full-time city employee will fill the permanent position of Community Development Manager. The Project Manager will be responsible for overall project management and insuring compliance with applicable Federal, State and local requirements for the CDBG project. The Project Manager will serve as the City's liaison with MDOC for the project and will serve as the Labor Standards Officer. More specifically, the Project Manager will: • Develop, in consultation with the City Attorney, CDBG and HOME contracts with MDOC. • Assure compliance with all applicable procurement and -civil rights requirements. The City has an equal opportunity plan and a fair housing ordinance currently in place. • Review all project expenditures, process pay requests, and draw down requests in coordination with the Finance Director. • Prepare or review and submit all CDBG and HOME draw requests and reports. • Monitor all CDBG and HOME project activities for compliance with all applicable requirements. • Establish and coordinate the maintenance of complete and accurate project files. • Review in conjunction with the City Attorney construction contract provisions for compliance. • Conduct in conjunction with the Project Architect the pre -bid and pre -construction conferences. • Review monitoring of contractor compliance with all applicable requirements • Review and recommend for approval all contractor requests for payment. • Review monitoring of construction for quality, completeness, and conformance with the project schedule. • Prepare or review and submit all CDBG close out documents. • Monitor the project for long-term compliance with income targeting and compliance with all other CDBG, HOME and City requirements. 2001 CDBG Housing & Neighborhood Revitalization Application Page 3 of 16 City of Kalispell 1 4�7: 1 Project Coordinator, Carol Grigg -(406) 758-7743 Carol. Grigg of the Community Development Department will be designated as Project Coordinator and will be responsible for overall files, tracking of expenditures, and assisting with draw downs and close out procedures: More specifically, the Project Coordinator will: • Serve as the Project Labor Standards Officer. Approve weekly payroll reports and review applicable employee interview records and on -site reports. Any discrepancies will be cleared up with the general contractor or the subcontractors through the general contractor in writing and written consent from the employee in question. • Review and recommend approval of all contractor requests for payment • Track, separately from the Finance Department, all expenditures as applied to both the CDBG and HOME grants. • Monitor construction for quality, completeness, and conformance with the project schedule. • Assist in completing all required performance reports and close out documents. Administrative Assistant Becky Spain 406 7 8-7740 Becky Spain will be responsible for going onto the construction site and conducting the "Record of Employee Interview? form, HUD11 (9-86) in which the interviewed employee provides such information as: Name and address; last date worked on project before current day; his/her hourly pay rate; job classification; duties; equipment used; and most importantly, the duties Becky actually observed the employee performing prior to the interview. These interviews will be turned in weekly to the Project Coordinator for verification against the certified payrolls. Becky will also verify by visual sight and documented photographs that all the pertinent EEO posters, labor wage rate schedules, etc. as required in the pre -construction conference, are posted in a conspicuous and easily accessible area of the construction site. PROJECT ARCHMCT to be selected throe h the RFP Process An affiliate of The L.P., Hampstead Partners, Inc., will have its in-house architect do a portion of the design work for The Project. An outside architectural firm pursuant to the RFP process will perform the bulk of the architectural and engineering work. The Project Architect will be responsible for: • Design and construction engineering and architectural plans for The Project. • Preparation of the construction bid packaging, in conjunction with the City, in conformance with applicable CDBG and HOME requirements and supenision of the bid advertising, tabulation, and award process, including the preparation of the advertisements for bid solicitation, conducting the bid opening, and issuance of the notice to proceed. • Conducting, in conjunction with the Project Manager for the City, the preconstruction conference. • Supervision of construction work and preparation of inspection reports. • Reviewing and approving all requests from contractors for payment and submitting the approved requests to the Project Manager. 2001 CDBG Housing & Neighborhood Revitalization Application City of Kalispell Page 4 of 16 Keeping the Project Manager informed of all significant construction project activities, including the preparation of regular reports (written and verbal) as required by the City's contract for architectural services. PROJECT CONTRACTOR (to be selected through the competitive bidding process) A general contractor will be selected in accordance with all applicable CDBG, HOME, and other federal, state and local regulations. The contractor must be appropriately bonded, have all required insurance, and not be debarred from participating in CDBG or HOME funded projects. The contractor will be responsible for the construction work in accordance with approved plans, specifications, and bid documentation requirements. The construction contract will specify the work to be completed and warranted as well as compliance with all applicable CDBG, HOME and other federal, state, and local regulations. UNITED WA Y— SHERRY STEVENS WULF, EXECUTIVE DIRECTOR, (406) 752-7266 United Way and The City have entered into the Sub -Recipient Agreement with the City administering all CDBG and HOME grant funds utilized on the construction of The Project. Attachment C. Upon receipt of the grant funds by the City, United Way will be admitted as a Co -General Partner in The L.P. and utilize any cash flow it receives from The Project to provide empowerment programs and various services for low and very -low elderly income residents within the Project. The only administrative costs that will be charged to The Project by United Way will be the cost of an annual audit that will be paid from income that United Way receives from The Project. All income United Way receives from the project will be held in a separate Federally Insured account and financial statements will be generated no less than quarterly. The funds will be used to address the needs of senior low and very -low income senior residents within The Project. The funds will be invested in accordance to current investment policies, which are developed by United Way's Finance Committee. All reports will be submitted to the City of Kalispell, United Way's Finance Committee and its Board of Directors. Upon award of the CDBG and the HOME Grants, United Way will create a Continuum of Care Senior Consortium that will analyze the current resources and existing needs of Senior Citizens who may reside at the project site. United Way will contract with Agency on Aging to provide on -site service delivery to the residents of The Project. The Continuum of Care Senior Consortium and United Way will review decisions regarding the expenditure of funding for the betterment of the seniors residing in The Project. Members of the Continuum of Care Senior Consortium are expected to be: •;• AARP ❖ Adopt a Senior Program ❖ Agency on Aging — Services: Meals on Wheels Ombudsman Discount Shopping Companion Care 2001 CDBG Housing & Neighborhood Revitalization Application Page 5 of 16 City of Kalispell 1 FJ s 1 Homemaker Program Legal Services Cash Management Services •'• Eagle Transit • Bus Service Taxi Service Coupons Medicab ❖ Elder Hostel -- FVCC ❖ Energy. Share & Low Income Energy Assistance Program ❖ Foster Grandparent Program ❖ Green Thumb Program ❖ Help Net — Telephone Reassurance Program for Seniors ❖ Home Chores Program ❖ Home Health Care • Home Visitor Program •'• Hospice •:• Intergenerational Programs With Local Schools 4• Life Line ❖ Low Vision Services & Services For the Blind •'• Montana Senior Olympics ❖ Onsite — Food Stamps, Medicaid, etc. ❖ Public Health Department Services Brown Bag Medicine Program Immunizations Toe Nail Clinic ❖ RSVP ❖ Senior Surplus Home Delivery Program (Food Bank(RSVP/AOA) ❖ Senior/Neighborhood Walk Program (Coordinators) ❖ Successful Aging Program — The Summit — Exercise/.Rehab THE L.P. 2'd Avenue West Partners, L.P., a Montana limited partnership, shall hold title to The Project. The members of the partnership are Hampstead Second Avenue West, L.L.C., a Montana limited liability company as managing general partner, United Way as co -general partner, and the tax credit investor partner. The L.P. shall, among other things: • Acquire the site needed for development of the project and pay for all third party due diligence costs and fees as reasonably necessary to acquire the total site for development of The Project, including but not limited to all legal expenses. 2001 CDBG Housing & Neighborhood Revitalization Application City of Kalispell Page 6 of 16 50, e Provide such financial and other guarantees necessary to sell the tax credits and close the transaction. • Contract with Tamarack Property Management Co. of Billings, Montana, for the third party management of the facility. The complete delineation of duties and responsibilities of The L.P. is set forth in the Memorandum of Understanding and the Agreement of Commitment attaches! as Exhibits A and B respectively hereto and incorporated by reference. Hampstead Partners, Inc. is a closely held corporation with extensive experience in the development of affordable housing. HP shall, Serve as the developer of the project and as construction manager, in conjunction with the City and The L.P., with primary responsibility for all development activities including oversight of all third parties through to completion of the project. FINANCIAL MANAGEMENT OF THE GRANT FUNDS 1 Financial management will be done in accordance with all applicable federal, state and local requirements. . In order to assure proper financial management of the project, the following activities and procedures will be implemented. The City shall, • Establish non -interest bearing CDBG and HOME bank accounts and transfer CDBG and HOME funds from those accounts to the City's treasury for disbursements, based on claims and supporting documents approved by the Project Manager, the Construction Manager, and the Project Architect. Since the City uses an interest bearing account for its general disbursements, a separate non -interest bearing account will be used for the CDBG and HOME funds. Balances in that account will not exceed $5,000 for a period of three days. Enter all CDBG and HOME project transactions into the City's existing accounting system (BARS), and prepare checks for approved expenditures. • Through the Finance Director, with the assistance of the Project Manager, prepare the final financial report for project close out. 2001 CDBG Housing & Neighborhood Revitalization Application Page 7 of 16 City of Kalispell • Through the Project Manager review all proposed expenditures of CDBG and HOME and will prepare draw down requests, which will be signed by the officials cited above. All disbursements will- be handled in accordance with the City's established claim review procedures. Before submitting the claim to the Department Director, the Project Manager will attach a certif cation' to each claim stating the proposed expenditure is an eligible expense to the City's CBDG and HOME Project and is consistent with the project budget. The Council will review all CDBG, HOME and City claims before approving them. Cause all draw down requests to be signed by two of the following four persons: Chris A. Kukulski, City Manager; Amy Robertson, Finance Director; Carol Kostman, Assistant Finance Director; or Susan Moyer, Community Development Director, if the draw down was prepared by the Project Manager Lynn Moon or her replacement. No expenditure of CDBG, HOME or City funds will be made without the approval of the Council at a regular meeting. Financial record keeping will be done in conformance with the recommendations of the MDOC/Local Government Services Bureau as required by the CDBG and HOME Programs. The original financial documents (claims with attached supporting material) will be retained in the Finance Department located within City Hall. Duplicate claims will be retained in the Community Development Department. RENTAL HOUSING FACILITY MANAGEMENT PERIOD OF AFFORDABILITY The project will remain affordable for a minimum of 35.years. A deed restriction will be placed upon the property to ensure the 35--year period of affordability. The developed project will have monthly inspections performed by the Property Management Agent for The L.P. during its 35-year period of affordability to ensure that the units remain safe, decent and sanitary. In addition, the project will have annual inspections by the Montana Board of Housing to insure Low Income Tax Credit compliance. FACILITY MANAGEMENT PLAN SECOND AVENUE WEST SENIOR HOUSING PROJECT 2001 CDBG Housing & Neighborhood Revitalization Application City of Kalispell Page 8 of 16 Owners' Responsibility The primary responsibility of The L.P. with respect to The Project is to assure that the property is operated in a fashion consistent- with good professional management practices and in a manner conducive to the preservation and enhancement of a desirable living environment. The L.P. shall, among other things: ➢ Provide decent, safe and sanitary housing for low and very -low income elderly residents. ➢ Provide housing to meet the needs of the elderly population being served. ➢ Review monthly progress reports, budgets and statements to assure financial viability. ➢ Maintain a properly management agent to perform the day-to-day management operations of the Project in conformance with this Management Plan. ➢ Accept ultimate financial responsibility for the project. Property Management A eg_nt A third party management company (Property Management Agent) has been selected for the development. Appendix L-3f in the CDBG Grant Application. The company is Tamarack Property Management Company, 2929 3'd Ave. North, Suite 538,.Billings, MT 59101-1944, Mr. Dale A. Fasching, President. This firm has a long history of managing low-income rental housing projects and is one of the largest property management companies in the state. The Property Management agent will be responsible for assuring that the residents receive prompt, efficient, courteous and quality service. They will perform the following functions, among others, assisted as necessary by additional staff and/or sub -contractors (See Management Agreement Appendix L-3t): ➢ Market the property for occupancy; ➢ Determine initial eligibility, tenant selection, and income certification qualification for initial and subsequent lease up; ➢ Lease the dwelling units and assist residents on move -in; ➢ Audit and organize all first year and subsequent tenant files with a tax credit consultant; ➢ Assure state tax credit compliance for all new residents and re -certifications through verification of all required documentation; ➢ Prepare a monthly report which will include trial balance, general ledger, profit and loss variance, rent roll, delinquencies, and a report of the prior month's move -ins and move -outs with all applicable information for owner review; ➢ Do random inspections of tenant files on a monthly basis to assure on -site manager accuracy and efficiency; ➢ Supervise the general administration of and physical operation of the property; ➢ Provide a preventative maintenance plan; ➢ Provide a fire safety plan; ➢ Maintain accurate records of the day-to-day operations of the property, including collecting and accounting for rental revenues; 2001 CDBG Housing & Neighborhood Revitalization Application Page 9 of 16 City of Kalispell L, 1 51, ➢ Prepare annual operating budgets for the site 45 days prior to year end for the following year for owner review; D Use its best efforts consistent with the standard of care set forth in the Management Agreement (see attached) to lease units, retain residents and maximize gross operating revenues; ➢ Conform to all federal and local agency requirements; ➢ Provide assistance in the field of resident counseling, guidance and social services. Personnel Policies and Staffing_ Arrangements All hiring will be in conformance with the City, United Way, HP and The L.P. existing policies and procedures, in conformance with federal, state and corporate requirements pertaining to equal opportunity. Staff for site property management, once the development is placed in service, will be employees of the Property Management Agent. Plans and Procedures For Achieving and Maintaining Occul2an Affirmative Marketing and Equal Opportunity The Project owners have adopted a Fair Housing Statement and Affirmative Marketing Policy to assure equal opportunity for all persons in participating in its programs and services. These policies and procedures are designed to actively provide information and other means to attract eligible persons from all racial, ethnic, and gender groups to the available housing. See Appendix L-3a in the CDBG Grant Application. Resident Selection Resident selection is one of the most important aspects of the management function. Resident selection will be the responsibility of the Property Management Agent and the On -site Manager, who will be sensitive to the needs of the people involved, yet aware of all eligibility requirements. If an applicant is ineligible, or eligible but not acceptable, he/she will be advised of the reasons for ineligibility or unacceptability. The reasons shall be stated on the application and kept on file. Resident Orientation New residents will be taken on a tour of the development and shown its recreational/common area facilities. A move -in packet concerning appliance care, proper payment of rent, general rules and regulations, resident's responsibilities and management responsibilities will be given and explained to new residents. Inspection The On -site Manager and the prospective resident will inspect the specific unit that the resident is to occupy, prior to signing a Lease. The resident and the On -site Manager will sign an apartment condition checklist which states in detail any defects of the unit. 2001 CDBG Housing & Neighborhood Revitalization Application Page 10 of 15 City of Kalispell 5 4. Resident Retention The goal for any income producing property is to maintain atigh level of occupancy. Turnover is costly and is to be avoided if at all possible. Every effort will be made to have the resident feel that this property is not just an apartment but their home. Every resident will be made to feel valuable through prompt responses to their specific needs, a positive attitude from On -site management and maintenance staff, monthly pot luck dinners and other events, various resident services as noted on page 6 and resident referral policies. We value our residents and will make every reasonable effort to retain them. Tenant Selection and Income Tar etin Tenants will have annual household incomes that comply with the CDBG and HOME requiremer4s at the initial lease up. 50% of the units will be occupied by individuals/fatnilies with annual incomes at. 50% or less of AMI; 37.5% of the units will be occupied by individuals/families with annual incomes at 60% or less of AMI; and 12.5% of the units will be occupied by individuals/families with annual incomes that are 80% or less of AMI. The On -site Manager, will take applications during normal working hours, interview the applicant and explain the regulations and policies associated with the development. Tenant applications will be processed on a "first come, first served" basis. Once the rental units are fully occupied, applicants who have been qualified will be placed on a written waiting list in the chronological order of their application. Prompt written notification will be given to any rejected applicant, including the reason(s) for the rejection. Procedures for Determininiz Resident Eligibili Eligibility must be determined on the basis of a personal interview and verification of all pertinent information, The on -site manager will have a complete handbook to assist him or her in establishing resident qualifications. If eligibility is tentatively established, the applicant's income and assets will be verified. Written release of information authorizations from an applicant (and other family members when necessary) will be obtained and original copies will be maintained in the applicant's file. The identity and status of applicants will be verified through birth certificates, Social Security Administration identifications, drivers licenses, marriage certificates, divorce decrees, adoption papers, and other such documents. 1 2001 CDBG Housing & Neighborhood Revitalization Application Page 11 of 16 City of Kalispell Income will be determined from employment income, unemployment income, Workman's compensation, SSA and SSI benefits, Veteran's benefits, Pensions and Annuities, income from assets, business income, disability payments, etc. Under specific circumstances when all other efforts fail, information may be verified verbally if responses from income sources aren't received after four weeks. However, such verification will be fully documented in writing, signed by the star person obtaining the information, and kept in the resident's file. In addition to traditional income sources, income from assets will also be determined and added to the household income to arrive at the Gross Annual Income. Examples of such assets are cash assets, checking or savings accounts, certificates of deposit, IRA's Keoghs, Trust Accounts, stocks, bonds, real property etc. The Project will accept qualifying individuals that are receiving rental assistance from other programs, such as rental certificates, vouchers, and HOME TBRA assistance. If the applicant's income exceeds the appropriate income limit, the application will be declined. There will be no exceptions to this rule. If the applicant's income changes in the future, he/she may re -apply at that time. Lease ALPreement See Appendix L-3g for a sample of the lease agreement to be used. This Lease Agreement is substantially the same agreement utilized in the 7 Preservation Projects owned and operated by HP throughout Montana. Plans for CarEying Out An Effective Maintenance and Re air Program Regular Inspections Unit interiors will be inspected by the Property Management Agent on a quarterly basis to determine any maintenance item previously not reported by a resident. The goal is to be pro -active in the prevention of any deferred maintenance which could cause more serious damage in the future. Interior and Exterior Paintin A comprehensive interior and exterior painting schedule will be maintained for the Project. The Property Management Agent will insure that all interior and exterior surfaces are painted and in good repair as necessary to maintain The Project. Trash Removal Trash removal will be handled by the City of Kalispell. The residents will be instructed as to how and where to place their trash for pick-up. Trash removal is included in the monthly rent. Major Repairs Major repairs ($500 or more) will be sub -contracted. The Property Management Agent will determine proper corrective action. The City and the Property Management Agent have standard policies and procedures regarding procurement, including solicitation of bids from minority -owned enterprises and woman -owned enterprises (MBE, WBE) will be followed. 2001 CDBG Housing & Neighborhood Revitalization Application Page 12 of 16 City of Kalispell 56 Building and Common Area A schedule for cleaning entryways, halls, and common areas will be maintained by the On -site Manager and maintenance staff. Resident Requests/Emergency Maintenance Requests for management services are to be channeled through the On -site Manager's office at The Project. The resident will use a maintenance request form that will be supplied in their move -in packet as discussed earlier. Information that is obtained at the time of the request will include: the date, time the request was made, and the nature of the request. When the request has been satisfied, the employee completing the work will sign the request and enter the date and time of completion. Residents will be instructed in writing to contact the On -site Manager during normal business hours for these general requests. However, any emergency requests will be made to the On -site Manager at any time, with a back up emergency number being provided in case the Manager is unavailable. An emergency maintenance problem is one that, if not corrected without delay, would clearly constitute a health or safety hazard, or cause damage. Examples of an emergency are: ■ Fire in a residential unit, common area, or on the grounds. ■ Water leaks where water would damage property or personal possessions if left unattended. Sewer stoppage. Heating source not functioning. In the event of fire, flood, personal injury, or other serious problem potentially involving insurance the owner will be advised immediately by the Property Management Agent. Rent Collection Policies and Procedures Policies and procedures regarding collection and payment of rents will be clearly communicated to all residents in writing and the procedures for collection will be applied impartially. Therentcollection policy for the development will be a firm yet understanding application which, if unsuccessful in securing rent payment, will result in commencement of legal actions leading to eviction. Rent will be due on the first of the month and late on the 6"' (see attached lease), after which time a $ 3 0 late charge will apply. Rent payments will be made by check or money order and delivered to the On -site Manager. Partial payments will be discouraged whenever possible, but of course, extenuating circumstances will be taken into consideration. Partial payments will not delay the issuance of a Three (3) Day Notice (unless approved ahead of time in writing by the On -site Manager). Three (3) Day Notices are delivered after the St" of each month. If it is a weekend or holiday they will be delivered on the following workday. Once the file has been turned over to an attorney for eviction (approximately on the IP of the month) it is the Property Management Agent's discretion whether or not 2001 CDBG Housing & Neighborhood Revitalization Application Page 13 of 16 City of Kalispell 57, to cancel the eviction. Management will generally only cancel the eviction process after the resident has paid all late fees, past due rent and any applicable legal fees. The importance of beginning eviction proceedings as soon as legally permissible cannot be over emphasized; legal action, specifically for non-payment of rent, is a long process during which a resident will not be paying rent and such income loss can be devastating in a small project. This kind of problem will be handled quickly and, where possible, legal action will try to be avoided. Program For Maintenance of Adequate Accounting Records Aside from providing safe and sanitary housing, the Project will also maintain a viable, financially sound operational plan. The success of the development depends upon the net cash flow. The financial position of the development is of paramount importance. Good sound budgeting, realistic rents, preventative maintenance, all complement each other and are important if the development is to succeed. The Property Management Agent shall prepare and present to the Owner in a format approved by Owner, by November 15 of each year, an annual operating budget for the Project; which once approved by the Owner shall be the budget for the following year. Except in extreme cases, the Property Management Agent shall not incur any expenses that are not included within the approved budget for the current year. Once a budget is approved by Owner, any variations or changes must be approved by Owner in writing. The Project Owner will review the operating costs on a monthly basis to insure the budget is adequate to manage and operate the development efficiently and successfully. The Property Management Agent has a Certified Public Accountant on staff and has adopted a system of records and accounts which conform with generally accepted accounting practices. The Property Management Agent will keep and maintain at all times all necessary books and records relating to the leasing, management and operation of the Project, including all books and records relating to the reporting requirements under Code Section 42, and will prepare and render to Owner monthly itemized accounts of receipts and disbursements incurred in connection with its leasing operation and management: by the twentieth (20th) day of the following month. An annual audit report shall be prepared at Owner's expense, out of available cash flow, showing a balance sheet and an income and expense statement, all in reasonable detail and certified by an independent Certified Public Accountant selected by Owner. All books, correspondence and data pertaining to the leasing, management and operation of the Project shall, at all times, be safely preserved_ Such books, correspondence and data shall be available to Owner at all reasonable times, and shall, upon the termination of this Agreement be delivered to Owner in their entirety and upon request of Owner be delivered to Owner within thirty (30) days of such request. The Property Management Agent will maintain copies of files of all original documents relating to reporting requirements under IRS Code Section 42, leases, vendors and all other business of the Project in an orderly fashion at the property, which shall be the property of Owner and shall at all times be open to owner's inspection. Notwithstanding the foregoing, after the initial certifications are completed, the original files shall be sent to the Owner. All additional original resident information shall be sent to Owner after each re- certification or upon move -out. Identical copies of all files shall always be at the Project. 2001 CDSG Housing & Neighborhood Revitalization Application Page 14 of 16 City of Kalispell Plans for Resident/Management Relations Grievances: All resident grievances in the areas of management services, maintenance services, management policy, management personnel, and grievances concerning other residents will be required to be in writing and will be followed -up from the On -site Manager and/or Property Management Agent. It is the responsibility of management to maintain open lines of communication with the property residents and work to amiable solutions whenever possible. Management will be required to respond to any such written complaint promptly and courteously. Grievances of management towards residents of the project are likely to include such problems as lease violations, vandalism, noise, or other violations of the rules and regulations. Should these occur, the On - site Manager will meet with the resident to discuss the problem. The results of the meeting will be recorded in the residents file. Should the problem persist or the lack of cooperation not be remedied, management staff of The Project will ask for a second conference with the resident. Again, a record of the meeting will be placed in the resident's file. If the problem is still evident after these attempts at resolution, the resident will be given a notice to vacate. Leasing Procedures All residents will be required to sign a. lease. The term of the lease shall be not less than one year. If a resident moves in anytime other than the first day of a month, he will be required to pay a pro -rated share of the rent. The Property Management Agent will explain the provisions of thi lease to all residents. Plans for Security in The_PrWect In the site design, particular attention will be paid to landscaping, site lighting, and the ability to maintain visual surveillance of The Project's main entrance and principal circulation patterns. The project will be built with an intercom system that allows the residents to screen access to visitors. Residents will be encouraged to work together to assist in maintaining a tranquil and safe environment and in developing an on -going attention to security. Long Term Monitoring The City will be responsible for the long term monitoring of the project for compliance with CDBG and HOME requirements. - The project will be monitored to assure compliance with all low income elderly targeting and other CDBG and HOME requirements as well as proper management and maintenance of the facility. The City, CDBG and HOME requirements will be enforceable through a lien and deed restriction agreement on the Project. The City will conduct on -site monitoring visits of the facility at least annually during a 35-year retention period to assure compliance with occupancy and maintenance standards. 2001 CDBG Housing & Neighborhood Revitalization Application Page 15 of 16 City of Kalispell 59 Pro' ect ]Implementation Schedule A 12-month project development and construction schedule is provided on pp.2 and 3 of the Implementation and Management Section of the CDBG Grant Application. A "state of the art" critical path method schedule will be developed in consultation with the Project Architect to assure project completion within the 12-month period, well within 24 months from the time of CDBG and HOME's notice of funding award. The schedule may be adjusted to a 15-month period in the event of unusual weather or other conditions beyond the control of The City or the developer. Program Income Plan Program Income generated from the project will be returned to The City for use in other eligible CDBG and HOME activities as the "soft mortgages" are repaid. Any income United Way receives from the project will be used to provide services that will empower the elderly residents to lead healthier, happier and fuller lifestyles. United Way shall provide an annual audit to the City of Kalispell related to the receipt and expenditure of any income it derives from The project. The L.P. will provide an annual audit to the city. The City will approve the use of all Program Income generated from the repayment of the "soft" mortgages. As the "soft" mortgages are paid, the City Council, during its normal annual budgeting process, will approve the use of all Program Income. All Program Income derived from the repayment of the "soft" loans to The Project will be tracked as required by CDBG and HOME regulations and reported to the funding sources on an annual basis and used in accordance with applicable CDBG and Home guidelines. 2001 CDBG Housing & Neighborhood Revitalization Application City of Kalispell Page 16 of 16 The implementation schedule is included in the Uniform Application as well as described below. Due to the unknown weather conditions this winter, it is possible that the start of construction could slip a month, Construction Loan Commitment Construction Loan Closing Low Income Housing Tax Credits CDBG Grant Commitment HOME Grant Commitment Site Acquisition Zoning Infrastructure Available Environment Review Advertise For Architect/Engineer Design Completion Advertisement for Bid Construction Bid Award Building Permits Pre -Construction Conference Issue Notice to Proceed Begin Construction Complete Construction Audit (City) Marketing Rent -Up 8/23/01 January 2002 Awarded April 18, 2001 Anticipated November 2001 Anticipated December 2001 1/25/01 B-4 -- In Place In Place October 2001 October 2001 November 2001 December 2001 December 2001 January 2002 February 2002 February 2002 March 2002 December 2002 June 2002 All of 2002 End 4 h Qtr. 2002 Thru I' Qtr. 2003 1 1