2013-04-09 HRA Agenda PacketPLEASE TURN OFF CELL PHONES & PAGERS IN COUNCIL CHAMBERS.
MOUND HOUSING & REDEVELOPMENT AUTHORITY
REGULAR MEETING
TUESDAY, APRIL 9, 2013 6:50 P.M.
MOUND CITY COUNCIL CHAMBERS
Page
1. Open meeting
2. Action approving agenda, with any amendments
3. Action approving March 26, 2013 regular meeting minutes 1
4. Action approving claims 2 -5
5. Action on Resolution Authorizing Execution of a Tax Increment 6 -12
Pledge Agreement for Refinancing of the 2003C Tax Increment Bonds
6. Action on Resolution Authorizing Executive Director to Enter into a 13 -28
Contract with Signet Partners Corporation for Feasibility Study
7. Adjourn
MOUND HOUSING AND REDEVELOPMENT AUTHORITY
MARCH 26, 2013
The Mound Housing and Redevelopment Authority in and for the City of Mound, Minnesota, met
in regular session on Tuesday, March 26, 2013, at 6:55 p.m. in the council chambers of city hall.
Members present: Chair Mark Hanus; Commissioners Kelli Gillispie and Ray Salazar
Members absent: Commissioners Heidi Gesch and Mark Wegscheid
Others present: Executive Director Kandis Hanson, City Attorney Melissa Manderschied, CDD
Sarah Smith, Rita Trapp, Darren Kahmeyer, Scott Spangers, Robert Goodfellow, Blaze Fugina
1. Open meeting
Chair Mark Hanus called the meeting to order at 6:55 p.m.
2. Approve agenda
MOTION by Salazar, seconded by Gillispie to approve the agenda. All voted in favor. Motion
carried.
3 Approve minutes
MOTION by Hanus, seconded by Gillispie, to approve the minutes of the March 12, 2013
regular meeting. The following voted in favor: Hanus, Gillispie. The following voted against:
None. Salazar abstained from voting because he was absent from this meeting. Motion
carried.
4. Approve claims
MOTION by Salazar, seconded by Gillispie to approve the claims in the amount of $5,829.44.
All voted in favor. Motion carried.
5. Adiourn
MOTION by Salazar, seconded by Gillispie to adjourn at 6:58 p.m. All voted in favor. Motion
carried.
Attest: Catherine Pausche, Clerk
H
Chair Mark Hanus
1, 1ii1•.
2-
$4,762.45
$4,578.65
MOUND, MN 04/02/139:59 AM
Page 1
Payments
Current Period: April 2013
Invoice 117174 3/22/2013
Cash Payment
E 680 - 49800 -103 Part-Time Employees
PAYROLL REIMS 3 -22 -13 JANITOR SALARY
$301.70
Batch Name
0409COMBOND User Dollar
Amt $4,578.65
Transaction Date
Payments Computer Dollar
Amt $4,578.65
$2,276.30
Refer ,.m....,� w...»,49. COMMONBOND COMMUNITIES
$0.00 In Balance
Cash Payment
Refer
48 COMMON BOND COMMUNITIES _
$12.50
Invoice 118087
Cash Payment
E 680- 49800 -101 F T Empl Regular
PAYROLL REIMS 3 -22 -13 OFFICE SALARY
$980.30
Invoice 117157
3/22/2013
$17.28
Invoice 113480
Cash Payment
E 680 -49800 -111 Other IKM Maint
PAYROLL REIMS 03 -22 -13 MCE SALARY
$634.50
Invoice 117159
3/22/2013
$2,265.00
Invoice 117211
Cash Payment
E 680 - 49800 -122 FICA
PAYROLL REIMS 3 -22 -13 OFFICE ER TAX
$126.81
Invoice 117160
3/22/2013
$7.57
Invoice 118194
Cash Payment
E 680 - 49800 -130 Employer Paid Ins (GEN
PAYROLL REIMS 3 -22 -13 MTCE ER TAX &
$75.30
3/29/2013
Wells Fargo HRA 10120 Total
INSURANCE
Invoice 117162
3/22/2013
Cash Payment
E 680 - 49800 -131 Employer Paid Health
PAYROLL REIMS 3 -22 -13 OFFICE ER
$104.17
INSURANCE
Invoice 117163
3/22/2013
Cash Payment
E 680 - 49800 -121 PERA
PAYROLL REIMS 3 -22 -13 OFFICE ER 401K
$34.55
MATCH
Invoice 117165
3/22/2013
Cash Payment
E 680- 49800 -121 PERA
PAYROLL REIMS 3 -22 -13 BENEFITS
$18.97
CONSULTING 3113
Invoice 117174 3/22/2013
Cash Payment
E 680 - 49800 -103 Part-Time Employees
PAYROLL REIMS 3 -22 -13 JANITOR SALARY
$301.70
Invoice 117158
3/22/2013
Transaction Date
3/2912013
Wells Fargo HRA 10120 Total
$2,276.30
Refer ,.m....,� w...»,49. COMMONBOND COMMUNITIES
Cash Payment
E 680 - 49800 -121 PERA
401K ADMIN FEES 2 -13
$12.50
Invoice 118087
3/28/2013
Cash Payment
E 680 -49800 -430 Miscellaneous
AMERIPRIDE MT /CT UNIFORMS 2 -13 #6590
$17.28
Invoice 113480
3/15/2013
Cash Payment
E 680 - 49800 -307 Admin /Finance /Compute
MGT FEE APRIL 2013
$2,265.00
Invoice 117211
3/22/2013
Cash Payment
E 680 - 49800 -121 PERA
401K ADMIN FEES 3 -13
$7.57
Invoice 118194
3/28/2013
Transaction Date
3/29/2013
Wells Fargo HRA 10120 Total
$2,302.35
Fund Summary
10120 Wells Fargo HRA
680 HRA PUBLIC HOUSING $4,578.65
$4,578.65
Pre - Written Check $0.00
Checks to be Generated by the Computer $4,578.65
Total $4,578.65
-3-
Payments
04/04/13 9:12 AM
Page 1
Current Period: April 2013
Batch Name 040913HRA User Dollar Amt $4,762.45
Payments Computer Dollar Amt $4,762.45
$0.00 In Balance
Refer _ 6 ANDERSON, DAVID _
Cash Payment G 680 -22831 Security Deposit - Pets REFUND PET DEPOSIT- IKM UNIT #300 $250.00
DAVID ANDERSON
Invoice 04092013 4/3/2013
3/18/2013
Cash Payment
Transaction Date
414/2013
Wells Fargo HRA 10120 Total
$250.00
Refer
CENTERPOINT ENERGY(MINNEG
3/22/2013
Cash Payment
Cash Payment
E 680 -49800 -383 Gas Utilities
GAS SVC IKM 2 -19 -13 THRU 3 -20 -13
$1,099.00
Invoice 04092013 3122/2013
Transaction Date
4/3/2013
Wells Fargo HRA 10120 Total
$1,099.00
Refer
1 COVERALL CLEANING CONCEPTS _
Cash Payment
E 680 - 49800 -460 Janitorial Services
COMMERCIAL CLEANING SVC- IKM APRIL
$378.34
2013
Invoice 7070188581 411/2013
Transaction Date
4/2/2013
Wells Fargo HRA 10120 Total
$378.34
Refer _ e ...... .� .,.,
3 NS /I MECHANICAL , ,.,.,_ ..,. ,,,,...<�w
ICAL CONTRACTING,
,,..n �.,,.� n... a...M.,�, ..,..�,. -..: ... ......,
Cash Payment
E 680 - 49800 -440 Other Contractual Servic
REPAIR HOT WATER HEATER & PUMP AT
$422.94
IKM 2 -25 & 3-4
Invoice W27954
3/28/2013
Cash Payment
E 680 - 49800440 Other Contractual Servic
REPAIR EXPANSION TANK ON 4TH FLOOR
$681.53
IKM- REPLACE 2 GAGE GLASSES, GASKETS
& NUTS - CHECKED FOR LEAKS
Invoice W28018 3/31/2013
Transaction Date 4/3/2013
Refer 5 TRUE VALUE MOUND (IKM)
Cash Payment E 680 - 49800 -220 Repair /Maint Supply
Invoice 102427 3/7/2013
Cash Payment E 680 - 49800 -220 Repair /Maint Supply
Invoice 102449 3/7/2013
Cash Payment E 680 -49800 -220 Repair /Maint Supply
Invoice 102576 3/1312013
Cash Payment E 680 - 49800 -220 Repair /Maint Supply
Invoice 102567 3113/2013
Cash Payment E 680 - 49800 -220 Repair /Maint Supply
Invoice 102634 3/15/2013
Cash Payment E 680 - 49800 -220 Repair /Maint Supply
Invoice 102680
3/18/2013
Cash Payment
E 680 - 49800 -220 Repair /Maint Supply
Invoice 102787
3/22/2013
Cash Payment
E 680 - 49800 -220 Repair /Maint Supply
Invoice 102780
3/22/2013
Cash Payment
E 680 - 49800 -220 Repair /Maint Supply
Invoice 102869 3/26/2013
Transaction Date 4/3/2013
Wells Fargo HRA 10120
2 PK CASTERS -SHOP VAC, BATTERIES
RETURN 2 PK CASTERS -SHOP VAC
FIRE SYSTEM SAFETY LOCK
WHT CAULK SEALANT UNIT #103 IKM
MEN'S ROOM URINAL SCREEN -
DEODORANTBLOCK
Total $1,104,47
$21.88
-$5.87
$6.38
$4.26
$7.03
MOTOR TUNE UP, DISPOSABLE GLOVES,
$46.95
TRASH BAGS, KEYS
12 PK CABLE TIES
$2.45
EXT CORD, ROUND MOVING SLIDING DISCS
$44.87
DRAIN CLEANING TOOL, NUTS, BOLTS,
$5.97
SCREWS
Wells Far! 'IRA 10120 Total
$133.92
Refer 2 XCEL ENERGY
Cash Payment E 680 - 49800 -381 Electric Utilities
Invoice 465071011 3/27/2013
Transaction Date 4/2/2013
Fund Summary
680 HRA PUBLIC HOUSING
IJAIGIMA
Payments
Current Period: April 2013
04/04/13 9:12 AM
Page 2
ELECTRIC SVC 2 -23 -13 THRU 3 -25 -13 IKM $1,796.72
Wells Fargo HRA 10120 Total
10120 Wells Fargo HRA
$4,762.45
$4,762.45
Pre - Written Check $0.00
Checks to be Generated by the Computer $4,762.45
Total $4,762.45
-5-
$1,796.72
EXTRACT OF MINUTES OF A MEETING OF THE BOARD OF
COMMISSIONERS OF THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MOUND, MINNESOTA
HELD: , 2013
Pursuant to due call and notice thereof, a regular or special meeting of the Board
of Commissioners of The Housing and Redevelopment Authority in and for the City of Mound,
Minnesota, was duly held at the
o'clock P.M.
on , 2013, at
The following commissioners were present:
and the following were absent:
Commissioner
moved its adoption:
introduced the following resolution and
RESOLUTION NO.
RESOLUTION AUTHORIZING EXECUTION
OF A TAX INCREMENT PLEDGE AGREEMENT
A. WHEREAS, the City Council of the City of Mound, Minnesota (the "City "), has
on April 9, 2013 adopted a Resolution Accepting Proposal on sale of $2,580,000 Taxable
General Obligation Bonds, Series 2013B, providing for their issuance, pledging tax increments
for the security thereof and authorizing execution of a tax increment pledge agreement; and
B. WHEREAS, to provide additional security for the payment of the Bonds it is
necessary that The Housing and Redevelopment Authority in and for the City of Mound,
Minnesota (the "Authority "), execute the Tax Increment Pledge Agreement as provided herein.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of The
Housing and Redevelopment Authority in and for the City of Mound, Minnesota, as follows:
The Tax Increment Pledge Agreement on file in the office of the City Finance
Director /Clerk/Treasurer is hereby approved in substantially the form submitted and the Chair
and Executive Secretary of the Authority are authorized and directed to execute the same (and
such other agreements and documents as may be required in connection therewith) on behalf of
the Authority. The approval hereby given to the document referred to above includes approval
of such additional details therein as may be necessary and appropriate and such modifications
thereof, deletions therefrom and additions thereto as may be necessary and appropriate and
approved by the City Attorney and by the Authority officials authorized herein to execute or
accept, as the case may be, said document prior to its execution; and said Authority officials are
hereby authorized to approve said changes on behalf of the Authority.
19
5378116v1
The motion for the adoption of the foregoing resolution was duly seconded by
commissioner and, after full discussion thereof and upon a vote
being taken thereon, the following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
-7-
2
5378116vl
CERTIFICATION
I, the undersigned, being the duly qualified and acting Executive Secretary of The
Housing and Redevelopment Authority in and for the City of Mound, Minnesota, DO HEREBY
CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a
meeting of the Board of Commissioners of said Authority held on the date indicated therein with
the original thereof on file in my office, and the same is a full, true and complete transcript
therefrom insofar as the same relates to a resolution authorizing execution of a Tax Increment
Pledge Agreement.
WITNESS my hand as Executive Secretary on 2013.
Executive Secretary
5378116x1
TAX INCREMENT PLEDGE AGREEMENT
THIS AGREEMENT, is dated as of April 9, 2013 and the parties to this Agreement are
the City of Mound, a Minnesota municipal corporation, herein called the "City ", and The
Housing and Redevelopment Authority in and for the City of Mound, Minnesota, a public body
corporate and politic herein called the "Authority",
Recitals:
A. WHEREAS, the City and the Authority have heretofore established Development
District No. 1 (the "Project Area ") and approved a Plan (the "Project Plan") for the Project Area;
and within the Project Area, the Authority and the City have heretofore established Tax
Increment District No. 2 -1 (the "TIF District "); and
B. WHEREAS, the Authority and the City have proposed that the City issue general
obligation bonds in the maximum principal amount of $2,580,000 of which $ is the
"Refunding Portion" (the "Bonds ") in order to refund in advance of maturity the $2,300,000
original principal amount of Taxable General Obligation Tax Increment Bonds, Series 2003C,
dated July 1, 2003; and
C. WHEREAS, the Authority has agreed to pledge certain tax increments from the
TIF District to the City for the principal and interest on the Bonds; and
D. WHEREAS, pursuant to Minnesota Statutes, Section 469.178, Subdivision 2, any
agreement to pledge tax increment revenues must be made by written agreement by and between
the Authority and the City and must be filed with the Taxpayer Services Division Manager of
Hennepin County;
NOW, THEREFORE, the City and the Authority mutually agree to the following:
(1) The City will issue the Bonds.
(2) The Authority hereby pledges to the payment of the principal of and interest on
the Bonds all Available Tax Increment. The term "Available Tax Increment' means the tax
increments received by the Authority from the TIF District as of any payment date on the Bonds,
less (a) 10% of the tax increments received in the prior six -month period, and less (b) the amount
needed on that payment date to pay any bonds, notes or contracts that were entered into before
the date of this agreement and are secured in whole or in part with tax increments from the TIF
District.
(3) The Authority estimates that Available Tax Increment will be sufficient to pay at
least 20% of the total principal and interest on the Bonds. The City agrees and understands that
upon issuance of any Bonds, the City will levy property taxes in the amount necessary, together
with Available Tax Increment, to pay 105% of the principal and interest of the Bonds.
(4) Not less than three (3) business days prior to each debt service payment date for
the Bonds, there shall be transferred from the account for the TIF District to the Debt Service
BE
5378116v1
Account maintained by the City for the payment of the Bonds, all Available Tax Increment. Any
Available Tax Increment in excess of 105% of the principal and interest due with respect to the
Bonds on any payment date may be retained by the Authority in the tax increment account for
the TIF District and applied to any public redevelopment costs of the TIF District or Project Area
in accordance with law.
(5) Without regard to anything in this Agreement to the contrary, Available Tax
Increment shall be available to pay, on a parity basis, principal of and interest on both the Bonds
and any other obligations issued by the City, Authority or any other public body after the date of
this Agreement, to finance public redevelopment costs paid or incurred by the Authority in
connection with the TIF District.
(6) When all principal and interest on the Bonds and other obligations issued to
finance the public redevelopment costs of the TIF District have been paid, and the City has been
reimbursed from collections of tax increment from the TIF District used to pay principal of and
interest on the Bonds, then the Authority shall report such fact to the City Council of the City
and the Authority shall submit a final statement of such payments.
(7) An executed copy of this Agreement shall be filed with the Taxpayer Service
Division Manager of the County pursuant to the requirement contained in Minnesota Statutes,
Section 469.178, Subdivision 2.
-10-
2
5378116v1
IN WITNESS WHEREOF, the City and the Authority have caused this Agreement to be
duly executed on their behalf and their seals to be hereunto affixed and such signatures and seals
to be attested, as of the day and year first above written.
CITY OF MOUND, MINNESOTA
Mayor
Attest:
Finance Director /Clerk/Treasurer
-11-
3
5378116v1
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
MOUND, MINNESOTA
By
Chair
Attest:
Secretary
TAX INCREMENT PLEDGE AGREEMENT relating to $2,580,000 Taxable General
Obligation Bonds, Series 2013B.
-12-
4
5378116v1
MEMORANDUM
Date: April 4, 2013
To: HRA Board Chair and Commissoners
From: Kandis Hanson, Executive Director
Catherine Pausche, Finance Director /Clerk/Treasurer
Subject: Indian Knoll Manor Public Housing
Since 2009, the Mound HRA has been evaluating options for ownership and management of
Indian Knoll Manor (IKM) Public Housing. A brief history includes:
• In February 2009, the Mound HRA ended a property management agreement with
Westport Properties. Property management was performed by the Finance Department
and maintenance by the Public Works Department.
• In 2010 the City reduced the size of City staff and options for the ownership and
management of Indian Knoll Manor Staff were considered.
• After expressing initial interest in management and ultimate ownership, the Carver
County Community Development Agency (CDA) Board voted not to assume
responsibility for IKM since it was not within Carver County.
• Since Hennepin County does not own or manage any of the public housing in the County,
transferring IKM to another unit of government was deemed unlikely.
• In 2011, and RFP for Property Management Services was issued and Common Bond
Communities (CBC) was awarded the contract. CBC owns affordable housing in Mound,
Excelsior, Maple Plain and numerous other locations throughout Minnesota and
Wisconsin.
• Staff has been exploring options for CBC to assume ownership of IKM in order to
provide for more efficient operations and eliminate the bureaucracy of having the HRA
as the middle -man.
The Mound HRA contracts with HUD and receives both operating and capital assistance from
HUD to provide rent subsidies at IKM. HUD has created Rental Assistance Demonstration
(RAD) program to allow Public Housing Authorities, nonprofits, and/or private developers to
combine both private equity and innovative HUD resources to rebuild, renovate, and preserve
housing projects as affordable rental housing. If IKM qualifies for this project, CBC could use
RAD funds to assume ownership and invest in renovating the building and converting it to
Project Based Section 8 affordable housing complex, similar to Westonka Estates and CBC's
other affordable housing units.
CBC recommends contracting with a consultant to perform a feasibility study to determine if
IKM would be a candidate for RAD assistance and CBC is willing to split the cost of the study.
If the study determines IKM is a viable candidate, CBC would assume any future costs related to
the application process.
-13-
March 27, 2013
Catherine Pausche
Director of Finance and Administration
City of Mound
5341 Maywood Road
Mound, MN 55364
Re: Indian Knoll Manor
Dear Catherine:
CommonBond Own
C O M M U N I T T E S
328 Kellogg Boulevard W.
St. Paul, MN 55102 -1900
651 -291 -1750 Phone
651 - 291 -1003 Fax
www.commonbond.org
As we have discussed, attached is a consultant proposal from Signet Partners Corporation to
prepare an Initial Feasibility Assessment to determine whether a RAD conversion appears
feasible for the Indian Knoll Manor property. The HUD RAD program provides the mechanism
to convert PHA assistance to an ongoing Project Based Section 8 rental assistance contract for
the property.
The consultant's scope of work and fee proposal are outlined in this document. As we
discussed, Commonbond has agreed to pay half of the $2,000 fee for this assessment.
CommonBond has also agreed that the city will own the consultant's report upon completion.
If we decide to proceed with the RAD application process, CommonBond will pay for all further
consultant work.
CommonBond is also doing an initial physical needs assessment and rehabilitation cost
estimate for the property, and we will share this information with the city as well.
We are seeking city approval to engage the consultant for the $2,000 feasibility assessment,
and for the city to fund half of the cost. Please let me know if you have any questions. Thank
you.
Sincerely,
Cy hia Lee
Associate Vice President
-14-
An Equal Oppm tonityl
A {fnnalive Action Organization
MOUND HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 13- H
RESOLUTION AUTHORIZING EXECUTIVE DIRECTOR TO ENTER INTO A CONTRACT
WITH SIGNET PARTNERS CORPORATION FOR FEASIBILITY STUDY
WHEREAS, the Mound HRA has periodically evaluated its options for management and
ownership of the Indian Knoll Manor Public Housing Apartment Building located at 2020
Commerce Boulevard; and
WHEREAS, the City entered into an agreement with Common Bond Communities in 2011 to
provide Property Management Services at Indian Knoll Manor; and
WHEREAS, Common Bond owns many HUD subsidized affordable housing buildings both in
the Mound area and all over Minnesota and Wisconsin; and
WHEREAS, there are efficiencies to be gained by Common Bond assuming direct control and
ownership of Indian Knoll Manor with minimal impact to tenants and freeing up of Mound HRA
administration staff time; and
WHEREAS, Common Bond has agreed to pay 50% of the $2,000 cost of a feasibility study to
see if Indian Knoll is a viable candidate for HUD RAD conversion; and
WHEREAS, the remaining cost can be covered under the current operating budget for Indian
Knoll Manor with any future costs of a HUD RAD conversation being paid for by Common Bond;
NOW, THEREFORE BE IT RESOLVED by the Housing and Redevelopment Authority of and
for the City of Mound, Minnesota, hereby authorizes the Executive Director to enter into a
contract with Signet Partners Corporation for a feasibility study as contained in the attached
Exhibit A.
Adopted this gth day of April, 2013.
Attest: Catherine Pausche, Clerk
Mark Hanus, Mound HRA Chair
-15-
Table of Contents
1. Cover Letter .................................................................................................................
..............................3
2. Experience and Capabilities ........................................................................................
..............................4
3. Understanding the Engagement ...................................................................................
..............................5
4. Experience with Similar Projects ................................................................................
..............................6
5. Key Personnel .............................................................................................................
..............................8
6. Project Plan & Deliverable ..........................................................................................
..............................9
7. References ..................................................................................................................
.............................10
8. Pricing ........................................................................................................................
.............................11
9. Additional Provisions .................................................................................................
.............................13
Mound Housing and Redevelopment Authority -17- 2
RAD: Consulting Services
Exhibit A
Mound Housing and Redevelopment Authority
HUD - Rental Assistance Demonstration Program:
Consulting Services
March 27, 2013
Signet Partners Corporation
7400 East Crestline Circle, Ste 150
Greenwood Village, CO 80111
-16-
1. Cover Letter
March 26, 2013
Mark Harms, Chairman
Mound Housing and Redevelopment Authority
5341 Maywood Road
Mound, Minnesota 55364
(952) 472 -0603
Re: Consulting Services — HUD Rental Assistance Demonstration Program (RAD)
Dear Mr. Harms,
Signet Partners Corporation is pleased to present the enclosed proposal to provide technical assistance and
consulting services to support of the City of Mound, Housing Redevelopment Authority's participation in
the U.S. Department of Housing and Urban Development's Rental Assistance Demonstration program. I
am confident that you will find that Signet has the demonstrated depth and breadth of subject matter
expertise and experience to successfully complete this task.
We have put together a comprehensive proposal complete with pricing. If we can provide additional
information, or if you have any questions whatsoever, please do not hesitate to contact me at (303) 773-
3330 extension 416 or by email at gklaas @signetpartners.com. Thank you for your consideration.
Sincerely,
B. Gregory Klaas
Senior Vice President
Cc: Cynthia Lee, CommonBond Communities
Mound Housing and Redevelopment Authority -18-
RAD: Consulting Services
2. Experience and Capabilities
Signet Partners (Signet) is a real estate consulting firm specializing in bringing order and solutions to real
property portfolios, projects & programs. www.signetpartners.com. Signet is an affordable housing
subject matter expert that is widely acknowledged by federal agencies, multifamily affordable housing
owners and FHA insured lenders alike. We represent:
12+ years serving as a HUD contractor and interface between HUD and owners of affordable
housing properties to provide comprehensive services related to the physical and financial
evaluation of multifamily properties and development of debt restructuring, capital improvement,
and physical rehabilitation/retrofit plans.
• Turnkey experience evaluating, underwriting, restructuring, and closing more transactions under
HUD's Section 8 Mark -to- Market (M2M) program than any other public or private Participating
Administrative Entity (PAE) with more than 800 transactions in 30 states.
• Significant experience reviewing and evaluating owner applications to similar HUD programs.
As a certified small business, Signet has provided financial services for federal real property programs for
23 years. We specialize in the implementation of government start-up programs and administration of
ongoing projects that create financial stability and performance accountability for government owned,
subsidized and /or loan - guaranteed properties. In over 40 multi -year, nationwide engagements, the most
relevant to this engagement is our experience supporting HUD's Office of Affordable Housing
Preservation (OAHP) in its Mark -to- Market (M2M) and Green Retrofit Program (GRP) programs — both
of which serve as prototypes for the new RAD program. Since 1999, Signet's dedicated staff has worked
extensively in all phases of these multi - family affordable housing preservation programs including:
review and evaluation of applications; underwriting candidate properties (financial, physical and
preservation worthiness); pro forma financial modeling using HUD tools to satisfy fundamental criteria of
both HUD and MAP lenders; rent determinations; creating immediate and long -term capital replacement
schedules; projecting replacement reserve needs; evaluating green and energy conservation retrofits;
administering construction disbursement escrows; and managing efforts of third -party vendors.
Mound Housing and Redevelopment Authority _19-
RAID: Consulting Services
s. y.
3. Understanding the Engagement
The Mound Housing and Redevelopment Authority requires the services of an experienced affordable
housing professional to assess its public housing property for possible participation the U.S. Department
of Housing and Urban Development (HUD) Rental Assistance Demonstration (RAD) program.
The City of Mound has established the Mound Housing and Redevelopment Authority (BRA). The
Mound City Council serves as the HRA. The HRA is a Public Housing Authority (PHA) which owns and
operates Indian Knoll Manor, a 50 -unit affordable housing apartment complex, located in Mound,
Minnesota.
The RAD program is governed by the terms of Housing Notice PIH- 2012 -32 (issued July 26, 2012, as
amended). The first component of the RAD program allows owners of projects funded under HUD's
public housing and Mod Rehab programs to apply, during the Ongoing Application Period, to convert the
type of assistance they currently receive to a long -term, project -based Section 8 rental assistance contract,
and receive either project -based vouchers (PBVs) or project -based rental assistance (PBRA). The HRA is
interested in exploring the possibility of converting its current assistance to PBRA.
To qualify for participation in RAD a PHA must meet certain eligibility criteria as specified in Section 1.3
of the Notice. A primary objective of RAD is to provide PHAs with access to debt financing to address a
property's immediate and long -term capital replacement needs. Therefore, a successful application must
demonstrate, among other things, the project's ability to access to private debt and equity to address
immediate and long -term capital needs (including reconfiguration of any units at the property) through
retrofit and rehabilitation. Section 1.5.A of the Notice permits PHAs, prior to approval of a project's
Financing Plan, to expend up to $100,000 in public housing program funds in related pre- development
conversion costs per project, such as materials and services related to proposed development, subject to
public housing procurement rules.
Signet views the process of participating in the RAD program as consisting of five separate and distinct
steps:
1. Initial Feasibility Assessment (Financial Screen) of the candidate property
2. Preparation/Submission of a RAD Application
3. Meeting Milestones — Preparation/Submission a Financing Plan, and other documents.
4. Closing the RAD Conversion
5. Completing/Inspecting the rehabilitation and retrofit work.
At this point, the HRA is only interested in taking the first step. The HRA's desire to engage Signet to
conduct an Initial Feasibility Assessment is the result of its discussions with CommonBond Communities
regarding a possible Transfer of the Physical Asset which would occur on or about the time of Closing of
a RAD conversion. It is the intent of the HRA for Signet to communicate through both parties, and to
provide information regarding the work performed with both parties, including the results of the Initial
Feasibility Assessment.
Mound Housing and Redevelopment Authority -20-
RAD: Consulting Services
S, y:
4. Experience with Similar Projects
Signet has over 12 years experience with federal real property programs similar to RAD, which makes us
uniquely qualified to provide the services sought by the Mound HRA. Relevant project experiences
include the following:
Client: U.S. Department of Housing and Urban Development (HUD), Office of Affordable Housing
Preservation (OAHP)
Contract Name: Mark -to- Market (M2M) Program (December 1999 — Present)
Signet Partners, as a private Participating Administrative Entity (PAE) assisting HUD /OAHP with the
administration of the M2M program since its inception in 1999, performs comprehensive services related
to the evaluation of project - based, Section 8, multifamily housing properties with expiring Housing
Assistance Payment (HAP) contracts.
Signet is one of three remaining program PAEs. In prior years, Signet also served as the teaming partner
for 15 public PAEs, including various state and local housing authorities. To date, Signet has evaluated,
underwritten, restructured, and closed more transactions under HUD's Section 8 M2M program than any
other public or private PAE; more than 800 transactions in 30 states.
Representative services include the following:
• Act as the interface between Section 8 property owners and HUD Regional and HQ staff.
• Conduct on -site meetings with owners, residents and other stakeholders to explain the M2M
program.
• Manage performance of 3`d party due diligence contractors including: order, track, review and
approve rent comparability studies, appraisals, green PCAs, energy audits, IPM reports, and
baseline utility consumption reports.
• Make recommendations to OAHP regarding: rents, immediate and long -term capital replacement
needs, energy conservation measures, 20 -year capital replacement schedules, as well as
immediate and annual funding needs of property capital replacements accounts.
• Analyze project audited financial statements, project income & expenses, and perform financial
underwriting and debt restructuring techniques that satisfies lender requirements.
• Assess suitability of existing ownership and property management.
• Establish preservation worthiness of property.
• Present plan information to HUD loan committees.
• Coordinate the closing; interface with legal counsel, title companies and escrow agents; prepare
requests to Transfer the Physical Asset.
• Keep HUD project managers and field office staff informed and answer their questions.
• Provide periodic reporting to HUD. Upload data, financial models and other information to HUD
websites.
Mound Housing and Redevelopment Authority -21-
RAID: Consulting Services
Client: U.S. Department of Housing and Urban Development (HUD), Office of Affordable Housing
Preservation (OAHP)
Contract Name: HUD Green Retrofit Program for Multifamily Housing (GRP) (June 2009 — Dec 2012)
The American Recovery and Reinvestment Act of 2009, (ARRA), pursuant to the section titled "Assisted
Housing Stability and Energy and Green Retrofit Investments" authorized HUD to make loans, make
grants, and take a variety of other actions to facilitate utility consumption saving retrofits, benefit
occupant health, and /or produce environmental benefits in certain existing HUD- assisted multifamily
housing (a/k/a the "Green Retrofit Program "). HUD /OAHP commissioned Signet Partners (Signet) to
help administer the program.
Between November 2009 and September 2010 Signet accepted assignments from HUD and created
project schedules for some 84 GRP assets. Signet was responsible for managing all milestones associated
with these assets from the review of the owner's application for entrance into the program through
verification of completion of the retrofit construction work.
Representative services include the following
• Order, track, collect, analyze and approve Green PCAs and Energy Audits for 84 GRP assets in
28 states over a 6 -month period.
• Underwrite Green Retrofit Loans and Grants; review /approve recommendations made by PCA
providers with respect to immediate capital replacement needs, 20 -year capital replacement
schedules, capital replacement cost estimates and estimated useful life cycle tables; establish the
scope of the Green retrofit work; create construction schedules /timelines and review contractor
bids for correct scope of work.
• Coordinate Green Retrofit closings, administer and disperse GRP funds. (Signet administered
tracked and provided reporting for some $84 million in GRP funds.)
• Inspect the completed retrofit work to verify compliance with GRP requirements. (Between
September 2010 and December 2012, Signet conducted, tracked and report to HUD on 240 green
retrofit inspections.)
• Prepare periodic reports to internal stakeholders on HUD metrics, ad hoc reports to senior HUD
staff, and quarterly reports for ARRA reporting compliance purposes. Format and upload tracking
information and reports to HUD's data information systems.
Mound Housing and Redevelopment Authority -22-
RAD: Consulting Services
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5. Key Personnel
The following Signet personnel are both available and have the requisite experience to perform some or
all of the work associated with this proposal. Greg Klaas is the Project Manager and will coordinate
completion of tasks by the Signet team. Zach Sloven is the back -up contact. We expect that the work
under this contract can be accomplished offsite, without the need for travel. We will review our
recommendations with the designated representative(s) of the HRA prior to issuing a final report.
Mound Housing and Redevelopment Authority -23-
RAID: Consulting Services
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10+ years financial and legal experience managing Signet
Greg
engagements with HUD, performing comprehensive QC reviews of
Klaas
debt restructuring plans, coordinating closings, conduc5ng post-
JD, MBA
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closing reconciliations, evaluating troubled entities, identifying
LEED AP
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recovery strategies, developing and implementing financial and
managerial monitoring reports and controls.
Zach
+ years underwriting multifamily apartment debt restructuring
Sloven
lans for HUD affordable housing programs, including loan sizing,
MS RE
Const. Mgt.,
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�nancial analysis, historical operating expense analysis, and
LEED AP
Professional
projecting immediate and long -term capital replacement needs.
Gary
5+ years of executive management experience in real estate,
Nesmith
banking operations and financial management including HUD's
BA MBA
J
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Sr.
M2M and the sales of HUD -held multifamily loans totaling $400M.
Professional
Oversees Signet's fiduciary responsibilities including managing
MS RE
Dorian
multi - million dollar construction escrow disbursement accounts,
Const. Mgt.,
Christian
change orders and draw requests for the rehabilitation and energy
LEED AP
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efficiency retrofitting of low- income, federally - subsidized,
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Professional
6uKbmilv housing projects.
Res. Cont.
Closing Coordinator for HUD /21M debt restructurings.
Amanda
Underwriter for nearly $20 million in GRP loans /grants. Perform
BA
Garlow
historical operating expense analysis, reviews of 3r° party due
MBA
Professional
diligence reports and physical need assessments, interface with
in process
lenders,
title companies, and closing escrow agents.
Underwrite /Develop multifamily affordable housing debt restructure
Melissa
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tans for HUD M2M program. Perform desk reviews of market rent
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eterminations. Prepare preservation worthiness assessments.
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Review 3`° party due diligence reports.
Mound Housing and Redevelopment Authority -23-
RAID: Consulting Services
6. Project Plan & Deliverable
Following acceptance of this proposal, Signet will provide consulting and technical services necessary to
perform an Initial Feasibility Assessment of Indian Knoll Manor and present our findings to the HRA.
Signet will commence its services by scheduling and conducting a kickoff conference call to review RAD
program guidelines, as well as goals and timeline for completion.
Kick -off call to cover the following:
• Establish points of contact.
• Review proposal objectives and requirements.
• Confirm timing of activities and completion dates.
Financial Screen/Initial Feasibility Assessment:
• Determine likely conversion rents. Estimate Gross Rents.
• Perform limited review of full -year operating budget/expenses, and vacancy /bad debt loss factors.
• Identify existing 3`d party reports. Perform limited review of existing due diligence information.
• Provide general estimate of immediate and long capital replacement needs.
• Identify existing, available (uncommitted) funding sources.
• Perform an initial feasibility screen. Estimate maximum supportable FHA insured mortgage.
• Identify /estimate possible funding gap.
• Brief the PHA on findings for their concurrence.
• Prepare /Present narrative summary report (Deliverable will be approximately 3 -5 pages long).
• Discuss Next Steps
Upon completion of the Initial Feasibility Assessment, Signet will be available to discuss providing
follow -on services in support of preparing and submitting a RAD application.
Follow -on Steps:
• Create development budgets incorporating all applicable sources and uses.
• Develop operating pro formas in conformance with program guidelines.
• Prepare /Submit draft RAD Application to the HRA for review and comment.
• Incorporate all HRA directed changes.
• Submit application to HUD on behalf of the HRA.
KICK OFF APPLICATION APPLICATION
ASSESSMENT REPORTING
MEETING - PREP SUBMISSION
Mound Housing and Redevelopment Authority -24-
RAD: Consulting Services
7. References
Jerry Anderson, Senior Advisor
HUD /Office of Affordable Housing Preservation
1670 Broadway
Denver, Colorado 80202 -4801
ierry r.anderson(aC7hud.M
(303) 810 -4579
Harry W. West, Director
Chicago Preservation Office
HUD /OAHP
77 West Jackson Blvd
Chicago, IL 60604
harryw.west@hud.aov
(312) 913 -8371
Theodore Trion, Director
HUD /Office of Multifamily Housing Development
451 7" Street SW
Washington, DC 20410
theodore.k.toon c hud.gov
(202) 708 -1142
Mound Housing and Redevelopment Authority -25- 10
RAID: Consulting Services
8. Pricing
A. Feasibility Assessment — Conduct a basic, limited scope economic analysis /financial screen to
determine whether a RAD conversion appears feasible at anticipated conversion rents. Signet
proposes to perform this task for the lump sum cost of $2,000. The deliverable will be a 3 -4 page
written report containing a narrative summary of Signet's findings. Signet will present its draft
findings to the HRA and CommonBond for their review /concurrence, via a conference call, prior
to producing a final report. The estimated time to complete this task is 14 days, depending upon
the HRA's ability to provide Signet with the information it needs to perform the task.
At the present time, the HRA has elected to proceed only with step one, a financial
screen/feasibility assessment. If this assessment indicates that a RAD conversion appears feasible
the next step would be to prepare and submit a RAD application. Should the HRA decide to take
the next step Signet will submit a separate proposal to perform this task. Pricing shown below is
for "next steps" and is included for illustration purposes only. Signet typically bills for these
additional services on an hourly basis, based on its then in effect hourly rates.
B. RAD Application - Prepare /Submit a RAD Application. We typically charge for this task based
on the actual number of hours expended, capped at a `not to exceed without prior approval of the
HRA' figure. The typical cost to perform this task is $2,000 - $3,000. However, significant
owner involvement is required to complete this, and all subsequent tasks. Thus, the cost to
complete this task is, at least in part, a function of ownership's level of commitment, and ability
to provide information/respond to Signet's questions. Other factors which can add complexity to
the process and increase the time needed to complete this and subsequent tasks, include without
limitation: the size, age, physical /environmental characteristics of the property, and the
availability /quality of financial information regarding the specific property for which an
application is being made. In addition, HUD expects applicants to estimate sources and uses of
funds in their RAD applications. These estimates must be updated and replaced with more
accurate figures as information regarding the property is developed and 3`d party due diligence
reports are obtained. Thus, acceptance in the program is not a guarantee that the property will be
able to complete the RAD conversion process.
C. CHAP Milestones/Financing Plan - If HUD accepts the RAD application and issues a
Commitment to enter into a Housing Assistance Payments contract (CHAP) ownership must meet
several milestones before HUD will approve closing of the RAD conversion. In order to meet
Mound Housing and Redevelopment Authority -26- 11
RAD: Consulting Services
these milestones, the PHA must prepare and submit several documents (as outlined in Section
1.12 of the Notice) for HUD review /approval within 30 days, 60 days, 90 days, 150 days, 180
days after HUD issues the CHAP. If desired, Signet can assist with the preparation and
submission of many of these documents, including the Lender Engagement Letter, Statement of
Development Team Capacity, Amendment to the HRA's Annual /Five Year Plan, and the
Financing Plan.
The Financing Plan may be the most difficult of these documents to prepare. We typically charge
for this task based on the actual number of hours expended, capped at a `not to exceed without
prior approval of the HRA' figure. The estimated cost to perform this task is $5,000 - $7,000.
Pricing does not include the cost to procure any 3rd party due diligence reports (such as a
Physical Condition/Needs Assessment). Pricing does include providing assistance in the
identification of potential PCA contractors, and conducting a review of the PCA and base
environmental assessment for compliance with the required RAD scope of work. The time and
effort to develop the Financing plan is, to a certain extent, dependent upon the findings of the 3`d
party reports, and whether these reports trigger the need for additional studies, such as
environmental or structural studies. If, for example, the 3`d party reports were to identify a need
for major rehabilitation, or ownership were to desire to reconfigure units at the property, this
would add complexity to the conversion and might trigger the need for the inclusion of additional
elements in the Financing Plan, such as a Relocation Plan.
D. Closing — If HUD accepts the Financing Plan (and other milestone documents) it will issue a
RAD Conversion Commitment (RCC). HUD expects a RAD conversion to close within 90 days
of the date the RCC is used. Signet can assist with coordinating the closing, including identifying
legal counsel, title insurance companies, and closing escrow agents and, can act as the interface
between HUD, the lender, ownership, and other various parties. The estimated cost is $5,000 -
$7,500 based on Signet's hourly rates.
E. Post Closing — In other HUD programs, Signet has acted as HUD's fiduciary and served as a
Rehabilitation Escrow Administrator for debt restructurings of Section 8 multi- family housing
properties. Signet has its own inspectors who can interface with contractors hired to perform the
rehabilitation work, prepare and submit draw requests for HUD's approval, and perform
inspections and verify that that the rehabilitation work completed matches the approved scope of
work. Upon request, Signet can discuss options for performing some or all of this work.
Mound Housing and Redevelopment Authority -27- 12
RAD: Consulting Services
9. Additional Provisions
Signet will invoice for this Agreement on a monthly basis.
The parties indicate their acceptance of this Agreement by signing in the appropriate space provided
below. Please note that the pricing presented in this proposal is valid for 30 days.
This Agreement shall be governed by and construed in accordance with the laws of the State of
Colorado and the laws applicable therein.
Please return the executed Agreement to Signet Partners. Once the original is received by Signet, it will
be signed, and a copy will be returned to the City. The effective date shall be the date executed by Signet
Partners.
IN WITNESS WHEREOF, the City of Mound HRA and Signet Partners Corporation have
executed this Contract through their duly authorized officers.
Date:
By:
Signature
Name:
Title:
Date:
By:
Signature
Name:
Title:
Mound Housing and Redevelopment Authority -28- 13
RAD: Consulting Services