HomeMy WebLinkAbout2019-012Resolution No. 2019-12
RESOLUTION NO. 2019-12
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF
THE CITY OF SAN BERNARDINO, CALIFORNIA,
AUTHORIZING THE EXECUTION OF A CONSULTANT
SERVICES AGREEMENT BETWEEN THE CITY OF SAN
BERNARDINO AND KEYSER MARSTON ASSOCIATES,
INC. FOR AFFORDABLE HOUSING SERVICES
WHEREAS, the City of San Bernardino receives HOME Investment Partnerships
Program (HOME) and has received Neighborhood Stabilization Program (NSP) funds from the
United States Department of Housing and Urban Development. The HOME and NSP funds
must be used in accordance with 24 CFR Part 924 and the Housing and Economic Recovery Act
Section 2301, respectively, and
WHEREAS, in order to adhere to the regulatory requirements for the use of HOME and
NSP funds, policies and procedures must be developed and underwriting and financial analysis
must be completed to evaluate a project's economic viability and ensure that the proportion of
funds dedicated to a project does not exceed established standards for the size, type and
complexity of the project; and
WHEREAS, in compliance with Chapter 3.04.010(B)(2) of the San Bernardino
Municipal Code, an interagency agreement was utilized for selection of Keyser Marston
Associates, Inc. as the consultant; and
WHEREAS, there is an ongoing need for specialized services relative to HOME and
NSP project requirements that can be performed by Keyser Marston Associates, Inc.
BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein by this
reference.
SECTION 2. The Mayor and City Council authorize the City Manager to execute the
Professional Services Agreement between the City of San Bernardino and Keyser Marston
Associates, Inc. to provide assistance to the Community and Economic Development
Department Housing Division, for a total amount not to exceed $160,000, in the form attached to
this Resolution as Exhibit A.
SECTION 3. The City Manager or designee is hereby authorized, upon completion of
the initial term of the Professional Services Agreement, to extend the contract for two additional
one-year terms, as needed, but not to exceed $45,000 per year.
SECTION 4. The Finance Director, or designee, is hereby directed to revise the FY
2018/19 Budget pursuant to the approved Professional Services Agreement.
Resolution No. 2019-12
SECTION 5. That the City Council finds this Resolution is not subject to the California
Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA
applies only to projects which have the potential for causing a significant effect on the
environment. Where it can be seen with certainty, as in this case, that there is no possibility that
the activity in question may have a significant effect on the environment, the activity is not
subject to CEQA.
SECTION 6. Severability. If any provision of this Resolution or the application thereof
to any person or circumstance is held invalid, such invalidity shall not affect other provisions or
applications, and to this end the provisions of this Resolution are declared to be severable.
SECTION 7. Effective Date. This Resolution shall become effective immediately.
APPROVED and ADOPTED by the City Council and signed by the Mayor and attested
by the City Clerk this 16th day of Jams 2019.
John Valdivia, Mayor
City of San Bernardino
Attest:
veofgeann_ arena, MMC, City Clerk
Approved as to form:
r
Gary D. Saenz, City Attorney
Resolution No. 2019-12
CERTIFICATION
STATE OF CALIFORNIA)
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO)
I, Georgeann Hanna, MMC, City Clerk, hereby certify that the attached is a true copy of
Resolution No. 2019-12 adopted at a regular meeting held at the 16'h day of January 2019 by the
following vote:
Council Members:
SANCHEZ
MARRA
VACANT
SHORETT
NICKEL
RICHARD
MULVIHILL
AYES NAYS
x
ABSTAIN ABSENT
WITNESS my hand and official seal of the City of San Bernardino this Wh day of Janu 2019.
--moi
Georgeann arena, MMC, -City Clerk
PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO
AND KEYSER MARSTON ASSOCIATES, INC.
This Agreement is made and entered into as of January, 23, 2019 by and between the City
of San Bernardino, a charter city and municipal corporation organized and operating under the
laws of the State of California with its principal place of business at Vanir Tower, 290 North D
Street, San Bernardino, CA 92401 ("City"), and Keyser Marston Associates, Inc. a privately
held California corporation with its principal place of business at 500 South Grand Avenue, Suite
1480 Los Angeles, California 90071 (hereinafter referred to as "Consultant"). City and
Consultant are hereinafter sometimes referred to individually as "Party" and collectively as the
"Parties."
RECITALS
A. City is a public agency of the State of California and is in need of professional
services for the following project:
HOME Layering Analyses: pursuant to the attached Proposal for Affordable Housing Services
— Proposed Scope of Services (Fiscal Year 2018-19) III A.
Mary Erickson Community Housing: pursuant to the attached Proposal for Affordable
Housing Services — Proposed Scope of Services (Fiscal Year 2018-19) III B.
Frazee Property Analysis: pursuant to the attached Proposal for Affordable Housing Services —
P.roposed Scope of Services (Fiscal Year 2018-19)11I C.
HOME Investment Partnerships Policies and Procedures Manual: pursuant to the attached
Proposal for Affordable Housing Services — Proposed Scope of Services (Fiscal Year 2018-19)
III D.
Proposed Scope of Services (Fiscal Years 2019-20 and 2020-21) IV: pursuant to the attached
Proposal for Affordable Housing Services, the specific assignments for fiscal years 2019-2020
and 2020-2021 have yet to be identified. However, it is anticipated that future assignments will
be similar in nature to those assignments identified for fiscal year 2018-2019.
B. Consultant is duly licensed and has the necessary qualifications to provide such services.
C. The Parties desire by this Agreement to establish the terms for City to retain Consultant
to provide the services described herein.
FaTM-R-M1► I DI1 1-11
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Incorporation of Recitals. The recitals above are true and correct and are hereby
incorporated herein by this reference.
2. Services. Consultant shall provide the City with the services described in the
Scope of Services attached hereto as Exhibit "A."
3. Professional Practices. All professional services to be provided by Consultant
pursuant to this Agreement shall be provided by personnel identified in their proposal.
Consultant warrants that Consultant is familiar with all laws that may affect its performance of
this Agreement and shall advise City of any changes in any laws that may affect Consultant's
performance of this Agreement. Consultant further represents that no City employee- will
provide any services under this Agreement.
4. Compensation.
a. Subject to paragraph 4(b) below, the City shall pay for such services in
accordance with Fees set forth in Exhibit "A." For the specific financial analysis projects and the
HOME Investment Partnerships Policies and Procedures Manual identified for Fiscal Year 2018-
19 (A -D in Proposed Scope of Services) the City shall pay $70,000. For projects requiring
services for similar financial analysis during the remaining two years of the Agreement (Fiscal
Year 2019-2020 and 2020-2021), the City shall pay $45,000 annually.
b. In no event shall the total amount paid for services rendered by Consultant
under this Agreement exceed the sum of $160,000. This amount is to cover all related costs, and
the City will not pay any additional fees for printing expenses. Consultant may submit invoices
to City for approval. Said invoice shall be based on the total of all Consultant services which
have been completed to City's sole satisfaction. City shall pay Consultant's invoice within forty-
five (45) days from the date City receives said invoice. The invoice shall describe in detail the
services performed and the associated time for completion. Any additional services approved
and performed pursuant to this Agreement shall be designated as "Additional Services" and shall
identify the number of the authorized change order, where applicable, on all invoices.
5. Additional Work. If changes in the work seem merited by Consultant or the City,
and informal consultations with the other party indicate that a change is warranted, it shall be
processed in the following manner: a letter outlining the changes shall be forwarded to the City
by Consultant with a statement of estimated changes in fee or time schedule. An amendment to
this Agreement shall be prepared by the City and executed by both Parties before performance of
such services, or the City will not be required to pay for the changes in the scope of work. Such
amendment shall not render ineffective or invalidate unaffected portions of this Agreement.
6. Term. This Agreement shall commence on the Effective Date and continue
through the completion of services as set forth in Exhibit "A," unless the Agreement is
previously terminated as provided for herein ("Term").
7. Maintenance of Records; Audits.
a. Records of Consultant's services relating to this Agreement shall be
maintained in accordance with generally recognized accounting principles and shall be made
available to City for inspection and/or audit at mutually convenient times for a period of four (4)
years from the Effective Date.
b. Books, documents, papers, accounting records, and other evidence
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pertaining to costs incurred shall be maintained by Consultant and made available at all
reasonable times during the contract period and for four (4) years from the date of final payment
under the contract for inspection by City.
8. Time of Performance. Consultant shall perform its services in a prompt and
timely manner and shall commence performance upon receipt of written notice from the City to
proceed. Consultant shall complete the services required hereunder within Term.
9. Delays in Performance.
a. Neither City nor Consultant shall be considered in default of this
Agreement for delays in performance caused by circumstances beyond the reasonable control of
the non-performing Party. For purposes of this Agreement, such circumstances include but are
not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and
other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances;
sabotage or judicial restraint.
b. Should such circumstances occur, the non-performing Party shall, within a
reasonable time of being prevented from performing, give written notice to the other Party
describing the circumstances preventing continued performance and the efforts being made to
resume performance of this Agreement.
10. Compliance with Law.
a. Consultant shall comply with all applicable laws, ordinances, codes and
regulations of the federal, state and local government, including Cal/OSHA requirements.
b. If required, Consultant shall assist the City, as requested, in obtaining and
maintaining all permits required of Consultant by federal, state and local regulatory agencies.
C. If applicable, Consultant is responsible for all costs of clean up and/ or
removal of hazardous and toxic substances spilled as a result of his or her services or operations
performed under this Agreement.
11. Standard of Care. Consultant's services will be performed in accordance with
generally accepted professional practices and principles and in a manner consistent with the level
of care and skill ordinarily exercised by members of the profession currently practicing under
similar conditions.
12. Conflicts of Interest. During the term of this Agreement, Consultant shall at all
times maintain a duty of loyalty and a fiduciary duty to the City and shall not accept payment
from or employment with any person or entity which will constitute a conflict of interest with the
City.
13. City Business Certificate. Consultant shall, prior to execution of this Agreement,
obtain and maintain during the term of this Agreement a valid business registration certificate
from the City pursuant to Title 5 of the City's Municipal Code and any and all other licenses,
permits, qualifications, insurance, and approvals of whatever nature that are legally required of
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Consultant to practice his/her profession, skill, or business.
14. Assignment and Subconsultant. Consultant shall not assign, sublet, or transfer
this Agreement or any rights under or interest in this Agreement without the written consent of
the City, which may be withheld for any reason. Any attempt to so assign or so transfer without
such consent shall be void and without legal effect and shall constitute grounds for termination.
Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in
this Agreement. Nothing contained herein shall prevent Consultant from employing independent
associates and subconsultants as Consultant may deem appropriate to assist in the performance
of services hereunder.
15. Independent Consultant. Consultant is retained as an independent contractor and
is not an employee of City. No employee or agent of Consultant shall become an employee of
City. The work to be performed shall be in accordance with the work described in this
Agreement, subject to such directions and amendments from City as herein provided.
16. Insurance. Consultant shall not commence work for the City until it has provided
evidence satisfactory to the City it has secured all insurance required under this section. In
addition, Consultant shall not allow any subcontractor to commence work on any subcontract
until it has secured all insurance required under this section.
a. Additional Insured
The City of San Bernardino, its officials, officers, employees, agents, and
volunteers shall be named as additional insureds on Consultant's and its subconsultants' policies
of commercial general liability and automobile liability insurance using the endorsements and
forms specified herein or exact equivalents.
b. Commercial General Liability
(i) The Consultant shall take out and maintain, during the
performance of all work under this Agreement, in amounts not less than specified herein,
Commercial General Liability Insurance, in a form and with insurance companies acceptable to
the City.
(ii) Coverage for Commercial General Liability insurance shall be at
least as broad as the following:
Insurance Services Office - Commercial General Liability
Coverage (Occurrence Form CG 00 01) or exact equivalent.
for the following:
(iii) Commercial General Liability Insurance must include coverage
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injury
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
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(7) Contractual Liability with respect to this Contract
(8) Broad Form Property Damage
(9) Independent Consultants Coverage
(iv) The policy shall contain no endorsements or provisions limiting
coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one
insured against another; (3) products/completed operations liability; or (4) contain any other
exclusion contrary to the Agreement.
(v) The policy shall give City, its elected and appointed officials,
officers, employees, agents, and City -designated volunteers additional insured status using ISO
endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same
coverage.
(vi) The general liability program may utilize either deductibles or
provide coverage excess of a self-insured retention, subject to written approval by the City, and
provided that such deductibles shall not apply to the City as an additional insured.
C. Automobile Liability
(i) At all times during the performance of the work under this
Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and
property damage including coverage for owned, non -owned and hired vehicles, in a form and
with insurance companies acceptable to the City.
(ii) Coverage for automobile liability insurance shall be at least as
broad as Insurance Services Office Form Number CA 00 01 covering automobile liability
(Coverage Symbol 1, any auto).
(iii) The policy shall give City, its elected and appointed officials,
officers, employees, agents and City designated volunteers additional insured status.
(iv) Subject to written approval by the City, the automobile liability
program may utilize deductibles, provided that such deductibles shall not apply to the City as an
additional insured, but not a self-insured retention.
d. Workers' Compensation/Employer's Liability
(i) Consultant certifies that he/she is aware of the provisions of
Section 3700 of the California Labor Code which requires every employer to be insured against
liability for workers' compensation or to undertake self-insurance in accordance with the
provisions of that code, and he/she will comply with such provisions before commencing work
under this Agreement.
(ii) To the extent Consultant has employees at any time during the
term of this Agreement, at all times during the performance of the work under this Agreement,
the Consultant shall maintain full compensation insurance for all persons employed directly by
him/her to carry out the work contemplated under this Agreement, all in accordance with the
"Workers' Compensation and Insurance Act," Division IV of the Labor Code of the State of
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California and any acts amendatory thereof, and Employer's Liability Coverage in amounts
indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the
period required by this Agreement, workers' compensation coverage of the same type and limits
as specified in this section.
e. Professional Liability (Errors and Omissions)
At all times during the performance of the work under this Agreement the Consultant
shall maintain professional liability or Errors and Omissions insurance appropriate to its
profession, in a form and with insurance companies acceptable to the City and in an amount
indicated herein. This insurance shall be endorsed to include contractual liability applicable to
this Agreement and shall be written on a policy form coverage specifically designed to protect
against acts, errors or omissions of the Consultant. "Covered Professional Services" as
designated in the policy must specifically include work performed under this Agreement. The
policy must "pay on behalf of the insured and must include a provision establishing the insurer's
duty to defend.
f Minimum Policy. Limits Required
(i) The following insurance limits are required for the Agreement:
Combined Single Limit
Commercial General Liability $1,000,000 per occurrence/ $2,000,000 aggregate
for bodily injury, personal injury, and property
damage
Automobile Liability $1,000,000 per occurrence for bodily injury and
property damage
Employer's Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and aggregate (errors and
omissions)
(ii) Defense costs shall be payable in addition to the limits.
(iii) Requirements of specific coverage or limits contained in this
section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of
any coverage normally provided by any insurance. Any available coverage shall be provided to
the parties required to be named as Additional Insured pursuant to this Agreement.
g. Evidence Required
Prior to execution of the Agreement, the Consultant shall file with the City
evidence of insurance from an insurer or insurers certifying to the coverage of all insurance
required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer's
equivalent) signed by the insurer's representative and Certificate of Insurance (Acord Form 25-
S or equivalent), together with required endorsements. All evidence of insurance shall be
signed by a properly authorized officer, agent, or qualified representative of the insurer and
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shall certify the names of the insured, any additional insureds, where appropriate, the type and
amount of the insurance, the location and operations to which the insurance applies, and the
expiration date of such insurance.
h. Policy Provisions Required
(i) Consultant shall provide the City at least thirty (30) days prior
written notice of cancellation of any policy required by this Agreement, except that the
Consultant shall provide at least ten (10) days prior written notice of cancellation of any such
policy due to non-payment of the premium. If any of the required coverage is cancelled or
expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s)
including the General Liability Additional insured Endorsement to the City at least ten (10)
days prior to the effective date of cancellation or expiration.
(ii) The Commercial General Liability Policy and Automobile Policy
shall each contain a provision stating that Consultant's policy is primary insurance and that any
insurance, self-insurance or other coverage maintained by the City or any named insureds shall
not be called upon to contribute to any loss.
(iii) The retroactive date (if any) of each policy is to be no later than the
effective date of this Agreement. Consultant shall maintain such coverage continuously for a
period of at least three years after the completion of the work under this Agreement. Consultant
shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced
past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if
the policy is replaced by another claims -made policy with a retroactive date subsequent to the
effective date of this Agreement.
(iv) All required insurance coverages, except for the professional
liability coverage, shall contain or be endorsed to provide waiver of subrogation in favor of the
City, its officials, officers, employees, agents, and volunteers or shall specifically allow
Consultant or others providing insurance evidence in compliance with these specifications to
waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery
against City, and shall require similar written express waivers and insurance clauses from each
of its subconsultants.
(v) The limits set forth herein shall apply separately to each insured
against whom claims are made or suits are brought, except with respect to the limits of liability.
Further the limits set forth herein shall not be construed to relieve the Consultant from liability
in excess of such coverage, nor shall it limit the Consultant's indemnification obligations to the
City and shall not preclude the City from taking such other actions available to the City under
other provisions of the Agreement or law.
i. Qualif3du Insurers
(i) All policies required shall be issued by acceptable insurance
companies, as determined by the City, which satisfy the following minimum requirements:
(1) Each such policy shall be from a company or companies
with a current A.M. Best's rating of no less than ANII and admitted to transact in the
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business of insurance in the State of California, or otherwise allowed to place insurance
through surplus line brokers under applicable provisions of the California Insurance Code
or any federal law.
j. Additional Insurance Provisions
(i) The foregoing requirements as to the types and limits of insurance
coverage to be maintained by Consultant, and any approval of said insurance by the City, is not
intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise
assumed by the Consultant pursuant to this Agreement, including, but not limited to, the
provisions concerning indemnification.
(ii) If at any time during the life of the Agreement, any policy of
insurance required under this Agreement does not comply with these specifications or is
canceled and not replaced, City has the right but not the duty to obtain the insurance it deems
necessary and any premium paid by City will be promptly reimbursed by Consultant or City
will withhold amounts sufficient to pay premium from Consultant payments. In the alternative,
City may cancel this Agreement.
(iii) The City may require the Consultant to provide complete copies of
all insurance policies in effect for the duration of the Project.
(iv) Neither the City nor the City Council, nor any member of the City
Council, nor any of the officials, officers, employees, agents or volunteers shall be personally
responsible for any liability arising under or by virtue of this Agreement.
k. Subconsultant Insurance Requirements. Consultant shall not allow any
subcontractors or subconsultants to commence work on any subcontract until they have
provided evidence satisfactory to the City that they have secured all insurance required under
this section. Policies of commercial general liability insurance provided by such subcontractors
or subconsultants shall be endorsed to name the City as an additional insured using ISO form
CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by
Consultant, City may approve different scopes or minimum limits of insurance for particular
subcontractors or subconsultants.
17. Indemnification.
a. To the fullest extent permitted by law, Consultant shall defend (with
counsel reasonably approved by the City), indemnify and hold the City, its elected and appointed
officials, officers, employees, agents, and authorized volunteers free and harmless from any and
all claims, demands, causes of action, suits, actions, proceedings, costs, expenses, liability,
judgments, awards, decrees, settlements, loss, damage or injury of any kind, in law or equity, to
property or persons, including wrongful death, (collectively, "Claims") in any manner arising out
of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of
Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection
with the performance of the Consultant's services, the Project, or this Agreement, including
without limitation the payment of all consequential damages, expert witness fees and attorneys'
fees and other related costs and expenses. Notwithstanding the foregoing, to the extent
Consultant's services are subject to Civil Code Section 2782.8, the above indemnity shall be
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limited, to the extent required by Civil Code Section 2782.8, to Claims that arise out of, pertain
to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.
Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any,
received by the City, the City Council, members of the City Council, its employees, or
authorized volunteers.
b. Additional Indemnity Obligations. Consultant shall defend, with counsel
of City's choosing and at Consultant's own cost, expense and risk, any and all Claims covered by
this section that may be brought or instituted against the City, its elected and appointed officials,
employees, agents, or authorized volunteers. Consultant shall pay and satisfy any judgment,
award or decree that may be rendered against the City, its elected and appointed officials,
employees, agents, or authorized volunteers as part of any such claim, suit, action or other
proceeding. Consultant shall also reimburse City for the cost of any settlement paid by the City,
its elected and appointed officials, employees, agents, or authorized volunteers as part of any
such claim, suit, action or other proceeding. Such reimbursement shall include payment for the
City's attorney's fees and costs, including expert witness fees. Consultant shall reimburse the
City, its elected and appointed officials, employees, agents, or authorized volunteers, for any and
all legal expenses and costs incurred by each of them in connection therewith or in enforcing the
indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to
insurance proceeds, if any, received by the City, its elected and appointed officials, employees,
agents, or authorized volunteers.
18. California Labor Code Requirements. Consultant is aware of the requirements of
California Labor Code Sections 1720 et seg. and 1770 et seg., as well as California Code of
Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the
payment of prevailing wage rates and the performance of other requirements on certain "public
works" and "maintenance" projects. If the Services are being performed as part of an applicable
"public works" or "maintenance" project, as defined by the Prevailing Wage Laws, Consultant
agrees to fully comply with such Prevailing Wage Laws, if applicable. Consultant shall defend,
indemnify and hold the City, its elected officials, officers, employees and agents free and
harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or
alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the
Consultant and all subconsultants to comply with all California Labor Code provisions, which
include but are not limited to prevailing wages, employment of apprentices, hours of labor and
debarment of contractors and subcontractors.
If the Services are being performed as part of an applicable "public works" or
"maintenance" project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant
and all subconsultants performing such Services must be registered with the Department of
Industrial Relations. Consultant shall maintain registration for the duration of the Project and
require the same of any subconsultants, as applicable. This Project may also be subject to
compliance monitoring and enforcement by the Department of Industrial Relations. It shall be
Consultant's sole responsibility to comply with all applicable registration and labor compliance
requirements.
19. Verification of Employment Eligibility. By executing this Agreement, Consultant
verifies that it fully complies with all requirements and restrictions of state and federal law
respecting the employment of undocumented aliens, including, but not limited to, the
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Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall
require all subconsultants and sub-subconsultants to comply with the same.
20. Laws and Venue. This Agreement shall be interpreted in accordance with the
laws of the State of California. If any action is brought to interpret or enforce any term of this
Agreement, the action shall be brought in a state or federal court situated in the County of San
Bernardino, State of California.
21. Termination or Abandonment
a. City has the right to terminate or abandon any portion or all of the work
under this Agreement by giving ten (10) calendar days' written notice to Consultant. In such
event, City shall be immediately given title and possession to all original field notes, drawings
and specifications, written reports and other documents produced or developed for that portion of
the work completed and/or being abandoned. City shall pay Consultant the reasonable value of
services rendered for any portion of the work completed prior to termination. If said termination
occurs prior to completion of any task for the Project for which a payment request has not been
received, the charge for services performed during such task shall be the reasonable value of
such services, based on an amount mutually agreed to by City and Consultant of the portion of
such task completed but not paid prior to said termination. City shall not be liable for any costs
other than the charges or portions thereof which are specified herein. Consultant shall not be
entitled to payment for unperformed services, and shall not be entitled to damages or
compensation for termination of work.
b. Consultant may terminate its obligation to provide further services under
this Agreement upon thirty (30) calendar days' written notice to City only in the event of
substantial failure by City to perform in accordance with the terms of this Agreement through no
fault of Consultant.
22. Attorneys' Fees. In the event that litigation is brought by any Parry in connection
with this Agreement, the prevailing Parry shall be entitled to recover from the opposing Parry all
costs and expenses, including reasonable attorneys' fees, incurred by the prevailing Party in the
exercise of any of its rights or remedies hereunder or the enforcement of any of the terms,
conditions, or provisions hereof. The costs, salary, and expenses of the City Attorney's Office in
enforcing this Agreement on behalf of the City shall be considered as "attorneys' fees" for the
purposes of this Agreement.
23. Responsibility for Errors. Consultant shall be responsible for its work and results
under this Agreement. Consultant, when requested, shall furnish clarification and/or explanation
as may be required by the City's representative, regarding any services rendered under this
Agreement at no additional cost to City. In the event that an error or omission attributable to
Consultant's professional services occurs, Consultant shall, at no cost to City, provide all other
services necessary to rectify and correct the matter to the sole satisfaction of the City and to
participate in any meeting required with regard to the correction.
24. Prohibited Employment. Consultant shall not employ any current employee of
City to perform the work under this Agreement while this Agreement is in effect.
25. Costs. Each Party shall bear its own costs and fees incurred in the preparation and
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negotiation of this Agreement and in the performance of its obligations hereunder except as
expressly provided herein.
26. Documents. Except as otherwise provided in "Termination or Abandonment,"
above, all original field notes, written reports, Drawings and Specifications and other documents,
produced or developed for the Project shall, upon payment in full for the services described in
this Agreement, be furnished to and become the property of the City.
27. Organization. Consultant shall assign Tim Bretz as Project Manager. The Project
Manager shall not be removed from the Project or reassigned without the prior written consent of
the City.
28. Limitation of Agreement. This Agreement is limited to and includes only the
work included in the Project described above.
29. Notice. Any notice or instrument required to be given or delivered by this
Agreement may be given or delivered by depositing the same in any United States Post Office,
certified mail, return receipt requested, postage prepaid, addressed to the following addresses and
shall be effective upon receipt thereof:
CITY:
City of San Bernardino
Vanir Tower, 290 North D Street
San Bernardino, CA 92401
Attn: Gretel K. Noble, Housing Manager
With Copy To:
City of San Bernardino
Vanir Tower, 290 North D Street
San Bernardino, CA 92401
Attn: City Attorney
CONSULTANT:
Keyser Marston Associates, Inc.
500 South Grand Avenue, Suite 1480 Los
Angeles, CA 90071
Attn: Tim Bretz, Principal
30. Third Party Rights. Nothing in this Agreement shall be construed to give any
rights or benefits to anyone other than the City and the Consultant.
31. Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and that it shall not discriminate against any employee or applicant for
employment because of race, religion, color, national origin, ancestry, sex, age or other interests
protected by the State or Federal Constitutions. Such non-discrimination shall include, but not
be limited to, all activities related to initial employment, upgrading, demotion, transfer,
recruitment or recruitment advertising, layoff or termination.
32. Entire Agreement. This Agreement, including Exhibit "A," represents the entire
understanding of City and Consultant as to those matters contained herein, and supersedes and
cancels any prior or contemporaneous oral or written understanding, promises or representations
with respect to those matters covered hereunder. Each Party acknowledges that no
representations, inducements, promises, or agreements have been made by any person which are
11
not incorporated herein, and that any other agreements shall be void. This is an integrated
Agreement.
33. Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such determination
shall not affect the validity or enforceability of the remaining terms and provisions hereof or of
the offending provision in any other circumstance, and the remaining provisions of this
Agreement shall remain in full force and effect.
34. Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the successors in interest, executors, administrators and assigns of each Parry to
this Agreement. However, Consultant shall not assign or transfer by operation of law or
otherwise any or all of its rights, burdens, duties or obligations without the prior written consent
of City. Any attempted assignment without such consent shall be invalid and void.
35. Non -Waiver. The delay or failure of either Party at any time to require
performance or compliance by the other Party of any of its obligations or agreements shall in no
way be deemed a waiver of those rights to require such performance or compliance. No waiver
of any provision of this Agreement shall be effective unless in writing and signed by a duly
authorized representative of the Parry against whom enforcement of a waiver is sought. The
waiver of any right or remedy with respect to any occurrence or event shall not be deemed a
waiver of any right or remedy with respect to any other occurrence or event, nor shall any waiver
constitute a continuing waiver.
36. Time of Essence. Time is of the essence for each and every provision of this
Agreement.
37. Headings. Paragraphs and subparagraph headings contained in this Agreement
are included solely for convenience and are not intended to modify, explain, or to be a full or
accurate description of the content thereof and shall not in any way affect the meaning or
interpretation of this Agreement.
38. Amendments. Only a writing executed by all of the Parties hereto or their
respective successors and assigns may amend this Agreement.
39. City's Right to Employ Other Consultants. City reserves its right to employ other
consultants, including engineers, in connection with this Project or other projects.
40. Prohibited Interests. Consultant maintains and warrants that it has neither
employed nor retained any company or person, other than a bona fide employee working solely
for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not
paid nor has it agreed to pay any company or person, other than a bona fide employee working
solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration
contingent upon or resulting from the award or making of this Agreement. For breach or
violation of this warranty, City shall have the right to rescind this Agreement without liability.
For the term of this Agreement, no official, officer or employee of City, during the term of his or
her service with City, shall have any direct interest in this Agreement, or obtain any present or
anticipated material benefit arising therefrom.
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41. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original. All counterparts shall be construed together and shall
constitute one single Agreement.
42. Authority. The persons executing this Agreement on behalf of the Parties hereto
warrant that they are duly authorized to execute this Agreement on behalf of said Parties and that
by doing so, the Parties hereto are formally bound to the provisions of this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
13
SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO
AND KEYSER MARSTON ASSOCIATES, INC.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
CITY OF SAN BERNARDINO
Approved By:
Andrea . Miller
City Manager
Approved as to Form:
****Approved Form****
Gary D. Saenz
City Attorney
Attested By:
Georgeann Wanna, MMC
City Clerk
14
CONSULTANT
Kathe Head
Managing Principal
EXHIBIT A
[***ATTACH OR INSERT: Scope of Services / Schedule of Charges and Payments / Activity
Schedule* * *]
15
EYSER MARSTON ASSOCIATES.
PROPOSAL FOR AFFORDABLE
HOUSING SERVICES
Prepared for:
City of San Bernardino
Prepared by:
Keyser Marston Associates, Inc.
January3, 2019
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Affordable Housing Services Page 1
TABLE OF CONTENTS
1. FIRM HISTORY AND EXPERIENCE................................................................................•...............2
II. DESIGNATED PERSONNEL..........................................................................................................3
III. PROPOSED SCOPE OF SERVICES (FISCAL YEAR 2018-19)..............................................................5
A. HOME LAYERING ANALYSES.................................................................................................................. 5
B. MARY ERICKSON COMMUNITY HOUSING................................................................................................ 13
C. FRAZEE PROPERTY ANALYSIS................................................................................................................ 15
D. HOME INVESTMENT PARTNERSHIP POLICIES AND PROCEDURES MANUAL .................................................... 18
IV. PROPOSED SCOPE OF SERVICES (FISCAL YEARS 2019-20 AND 2020-21) .................................19
A. LAYERING AND LEVERAGING ANALYSES................................................................................................... 19
B. DEVELOPERSOLICITATION/SELECTION....................................................................................................20
C. INCLUSIONARY HOUSING PROGRAMS..................................................................................................... 20
D. POLICIES AND PROCEDURES MANUALS................................................................................................... 20
E. = SB 341 AFFORDABLE HOUSING REPORTS.. .................... ........... ................................................ .......... — 20
F. COMPLIANCE MONITORING........................................................,.,..................................................... 20
G. RESIDUAL RECEIPTS CALCULATION AND COMPLIANCE................................................................................ 21
V. FEES........................................................................................................................................21
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I. FIRM HISTORY AND EXPERIENCE
January 3, 2019
Page 2
KMA is a full-service real estate, financial, affordable housing, public finance and economic consulting
firm that specializes in advisory and evaluation services. A privately held California corporation, KMA
was incorporated in 1973, and now has one of the largest real estate and affordable housing advisory
practices on the West Coast. The majority of KMA assignments involve long-standing client
relationships with city and county governments, including clients throughout Southern California.
KMA presently has 21 professional staff members, three corporate staff members, and four support
staff members. KMA has offices located in Los Angeles, Berkeley, San Rafael and San Diego. The
downtown Los Angeles office, which would provide services to the City of San Bernardino (City),
includes nine professional staff members, and provides consulting services to a wide range of
government agencies and a limited number of private sector clients in Southern California.
Some unique characteristics possessed by KMA include:
Experience
•Over 45 years experience in assisting all levels of public sector clients throughout the West in
-affordable housing, market rate, and evaluatlo`n services; developer selection and negotiation;and
structuring public investment in public/private transactions.
•KMA provides comprehensive services relating to affordable housing and financial feasiblity,
economic analysis, direct implementation experience and public finance without the need for
— multiple -consultants.
Approach
*The philosophy and structure of our firm is to provide our clients with the maximum direct
contact with principals. The commitment of principals who are recognized leaders in real estate
advisory services througout California provides our clients with quality, tailored and direct
serivices.
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KMA has developed a methodology and approach to ensure quality control for its analytical and
advisory services. The methodology and approach include the following:
•Each assignment is headed by one of the firm's experienced principals, selected based upon the
particular skill set required for the assignment. Kathleen Head manages the firm's affordable
housing practice.
-For projects where a variety of skill sets are required (i.e., a mixed-use project that includes both
affordable and market rate housing and a retail component), KMA will bring consulting principals
within the firm with the particular expertise required for the assignment.
•The firm has created subgroups which include selected principals and senior staff, to ensure that the
best practices and analytical tools are made available firm wide. These specialty groups meet on a
regularly scheduled basis and include such areas as affordable housing, mixed-use, public parking,
ground lease development and redevelopment finance.
•KMA has developed a series of proprietary models for financial feasibility analysis and fiscal impact
work to ensure auniformity of approach and analysis. -
11. DESIGNATED PERSONNEL
KMA has designated Tim Bretz -as the.Principalfor contract coordination for all affordablehousing
services to be provided to the City. The contact information for Tim is as follows:
Tim Bretz, Principal
500 South Grand Avenue, Suite 1480
Los Angeles, California 90071
Telephone: 213.622.8095 Fax: 213.622.5204
Email: tbretz@keysermarston.com
The KMA staff members who are anticipated to work on this engagement include Tim Bretz, and six
professional staff members. Summaries of the team member's relevant experience follow:
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Ti Bretz,
Principal
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Tim has been with KMA since 2008. During that time, he has assisted a
number of public agencies with affordable housing and real estate
assignments. Tim has performed affordable housing feasibility analyses, and
market and reuse analyses for residential, mixed-use, hotel, office and
industrial projects. He has also prepared residential nexus and commercial
linkage fee studies to support impact fees to be used to produce affordable
housing.
Kathleen Head, Kathe joined the firm in 1983 and manages the firm's affordable housing
Managing Principal practice. She also provides public and private clients with real estate
economic analyses for a wide variety of land uses. Kathe's specific areas of
expertise are affordable housing transaction structuring and program creation;
community benefits analyses related to proposed development; and
public/private joint development transactions.
Julie Romey, Since rejoining the firm in Julie joined the firm in 2000, Julie has provided
Senior Principal public and private clients with a wide range of market rate and affordable
housing consulting services. Specific expertise that is pertinent to this
proposed engagement is the creation of affordable housing procedures
manuals, compliance monitoring, and the preparation of SB 341 reports.
Greg Soo Hoo,
Greg is a registered Municipal Advisor Principal with the MSRB and the SEC.
Senior Principal
He has over 35 years of experience in redevelopment and public finance,
including acting as the Fiscal Consultant to Successor Agency and
Redevelopment Agency bond financings totaling over $6.2 billion.
Courtney Holt,
Courtney is a Senior Associate who joined KMA in 2017. Courtney has a
Senior Associate
background in asset management, economic and market analysis, and land use
planning. Courtney's work at KMA focuses on market and demographic
studies; affordable housing studies and nexus analyses; HOME Program
policies and procedures; and affordable housing monitoring and compliance
review.
Kimberly Heaton,
Kimberly joined KMA in 2000 and manages the firm's information services.
Senior Analyst
Kimberly conducts as -needed research on real estate development, land use,
finance, economic and legal issues. Additionally, she tracks industry news and
legislation, as well as market and statistical data of particular interest to KMA
and its clients.
Parker Dietz,
Analyst
Parker is an Analyst who has been with KMA since July 2018. He has assisted
with affordable housing transactions, and he has also performed market
feasibility studies.
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Kathleen Head has been with KMA since 1983. Kathe manages the housing related services performed
by the KMA Los Angeles office, and has extensive experience in program creation, policy analysis,
feasibility evaluations and transaction structuring. Kathe has analyzed hundreds of projects utilizing
various local, state and federal assistance packages.
Julie Rome y is a Senior Principal who rejoined KMA in 2000. Julie has provided public and private
clients with real estate economic analysis, and with expertise in market rate and affordable housing.
Julie has experience with HOME funds, HUD 202 and 811 funds, and various State of California housing
programs.
Tim Bretz is a Principal who has been with KMA since 2008. Tim has prepared numerous affordable
housing feasibility, market, and reuse analyses for the firm's public sector clients.
III. PROPOSED SCOPE OF SERVICES (FISCAL YEAR 2018-19)
The following describes the proposed scope of services anticipated to be provided during Fiscal Year
2018-2019.
A. HOME Layering Analyses
Proposed Projects
The City has established a first-time home ownership program that is available for use by qualified
Community Housing Development Organizations (CHDOs). Under the terms of the home ownership
program, the City transfers the title of vacant, City -owned parcels to the chosen CHDO. The CHDO
purchases these parcels from the City, and subsequently places single family houses on each of the
parcels.
KMA proposes to evaluate two ownership projects currently under construction. The first project is
being developed by Neighborhood Partnership Housing Services, Inc. (NPHS) and consists of three
manufactured houses. The second project is being developed by Housing Partners I, Inc. (HPI) and
consists of three wood -frame houses.
For each of the projects the following will occur:
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i
1. The City has already provided $650,000 in HOME funds to each of the projects.
2. The City will transfer the titles to the three single family parcels to each developer.
3. The single-family homes are currently under construction on each parcel.
4. Upon the completion of construction, the improved parcels will be appraised.
5. Both of the projects will likely experience cost overruns. The City intends to cover the cost
overruns with sales proceeds generated by the units or additional HOME funds.
Scope of HOW Program Layering Analyses
Each of the projects identified above requires a HOME Layering Analysis. As such, the project
underwriting, market assessment, developer capacity evaluation, and assessment of the developer fee
and profit will be conducted in accordance with HUD Community Planning and Development Notice
15-11. The KMA analysis will be provided to the City in the form of a memorandum and supporting
tables.
Project Underwriting Analysis
KMA will conduct an underwriting analysis for each project to evaluate the following:
1. Are the development costs reasonable, necessary, sufficient, and in compliance with the cost
principles set forth in 2 CFR Part 200?
2. Are the identified funding sources sufficient to pay for the development costs including soft
costs and costs incurred during the absorption period?
3. Is the proposed amount and disbursement schedule for the developer fee reasonable and
customary?
4. Are the development and funding entitlements in place?
5. Is the project likely to be completed within four years of the commitment date in HUD's
Integrated Disbursement Information System (IDIS)?
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6. Is the scope and budget for the project sufficient to meet the HOME property standards set
forth at 24 CFR 92.251 over the life of the affordability covenant imposed by the HOME
Program loan?
Market Assessment
KMA will conduct a market assessment based on the following steps:
1. Evaluate the relevant demographic, economic, and housing conditions;
2. Identify the geographic area from which the home buyers are likely to come;
3. Identify the target home buyers;
4. Analyze the potential impact of the project on other housing projects in the area;
5. Ascertain if adequate demand exists to sell the three units within the HUD -mandated
absorption period;
6. Estimate the demand and capture rate for the project; and
7. Estimate the absorption period for the project.
Develops .a acit Developer Ex erience
KMA will review and evaluate the developer's capacity and financial wherewithal to undertake the
development of the proposed project, including the following:
1. The adequacy of the developer's corporate and organizational experience;
2. The developer's working knowledge of affordable housing development, particularly in the
context of HOME rules and other cross -cutting federal requirements;
3. The developer's track record of successfully completing projects on schedule and within the
established budget as verified by representatives from the jurisdictions in which the projects
are located;
4. The developer's skill set as it relates to the development of the project; and
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5. The status of the contracts for the design, engineering, and construction of the project.
Developer's Financial Capacitv
KMA will review the pro forma for the project, the developer's financial statements, and information
pertaining to previously completed projects to determine whether the developer has the financial
capacity to undertake the development of the project. Based on that review, KMA will respond to the
following questions:
1. Does the developer have adequate financial management systems and practices?
2. Does the developer have sufficient financial resources to complete the proposed scope of
development?
3. Is the developer's net worth, portfolio risk, and liquidity adequate?
4. Does the developer have the resources to fund the company's overhead expenses, pre -
development costs, and bridge funding while waiting for other funding sources?
5. Does the developer have the financial capacity to undertake the development prior to the
payment of the developer fee? -
"aper Profit and Reis:,;
KMA will consider the following issues in the evaluation of the developer profit and return that could
potentially be�generate`d by the project:
1. Does the proposed developer fee reflect the local market? The developer fee will be reviewed
with respect to the following:
a. The scope and complexity of the project;
b. The size of the project;
C. The relative risk associated with the project;
d. Any costs the developer will fund with the proceeds of the developer fee;
e. The developer fees that are regularly and customarily allowed in similar projects; and
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Other fees that the developer is receiving from the project.
2. The potential for the developer to receive profit from the resale of the units will be described.
Certifications
Based on the results of the proposed analysis, the following certifications will be provided:
1. The identified funding sources are sufficient, and timely in availability, to cover the project
costs.
2. The estimated costs for the project are necessary, reasonable, and in compliance with the cost
principles described in 2 CFR part 200.
3. The scope and budget for the project are sufficient to meet the HOME property standards set
forth at 24 CFR 92.251 over the life of the affordability covenants imposed by the HOME
Program loan.
4. The market assessment confirms the demand for the project, and the project can be expected
to be fully occupied within the 18 -month period mandated by HUD.
5. The developer's experience and financial capacity are adequate to implement the project, and
meet the financial obligations and risks related to the project.
6. The developer fee, equity appreciation, and profit anticipated to be generated by the project
are appropriate. m
7. The project meets the minimum HOME investment requirement of $1,000 per HOME
designated unit.
8. The HOME Program assistance provided to the project does not exceed the subsidy limits, and
the appropriate number of units have been designated as HOME units as established by 24 CFR
92.504.
9. In accordance with 24 CFR 92.205 (e) (2), the project will be completed within four years of the
date the HOME funds are committed.
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10. The project will comply with the property standards and affordability requirements imposed by
CFR 92.252 (e).
Information Needs
KMA will need to be provided with the following information in order to complete the proposed scope
of services:
Project Description
1. A legible site plan that identifies the gross and net building areas for the project;
2. An identification of the entities anticipated to be involved in implementing the development of
the project. Identify the general contractor, the subcontractors, architects, engineers,
attorneys, accountants, and any other consultants; and
3. A timeline for the development of the project.
Flnandal '.reformation Related to the Proiect
-1.- The current pro forma for the project -which- identifies the following:
a. A detailed project budget; and
b. An identification of the funding sources that will be used to pay for the project costs,
and the provision of all currently_available=wr-itten commitments. The total funding
sources, including the proposed HOME loan, must equal the estimated development
costs for the proposed project.
2. The construction loan assumptions including:
a. Interest Rate;
b. Loan Term; and
C. Average outstanding balance.
3. The estimated closing costs and any other costs of sales associated with selling the units.
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4. A schedule of developer fee payments, and a description of how the developer plans to spend
the developer fee received from the project.
5. A description of any financial obligations and resale controls the developer proposes to impose
the home buyers.
6. A written request that identifies the amount of HOME Program assistance that is being
requested, the proposed disbursement schedule, and the proposed repayment structure.
Identify any financing sources to which the HOME loan and/or the income and affordability
covenants are proposed to be subordinated.
Marketing Plan
If available, provide a copy of the market assessment completed by the developer. If a market
assessment is not available, please provide the following information:
1. Identify the target home buyers for the project and describe how the prospective purchasers
will be selected.
2. Provide a summerdescription of the market rate units in the vicinity of the Site and- estimate
the difference between the prevailing market rate sales prices and the established affordable
sales prices for the units.
3. Indicate who will be responsible for marketing the units.
Relevant Experience
Provide descriptions of at least three projects that are directly analogous to the proposed project. Of
particular importance is the developer's experience with projects subject to HOME Program
regulations. The following information should be provided for each project:
1. Site location;
2. A narrative description of the project's characteristics;
3. Number of units in the project;
4. The total project costs;
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5. The income and affordability restrictions that were imposed on the project;
6. Identification of any public financial assistance that was provided to the project;
7. The role the developer played in the project; and
8. Contact information for a representative of the jurisdiction in which the project is located.
Financial Statements 1 Capacity
Provide audited financial statements for the developer for the past two years. If audited financial
statements are not available, please submit alternative evidence of the developer's financial capacity
to develop the project.
Describe the financial management controls that the developer applies to projects that have received
assistance from the Federal government. This information should identify the developer's policies
related to the following:
1. Treatment of information, such as records retention, requests for transfer of records, methods
for collecting, transmitting and storing information, access to records, and restrictions on public
access to records.
2. Identification of all Federal awards received and expended.
3. Disclosure of the financial results of each Federal award or program.
4. Records that identify the source and application of funds for Federally -funded activities.
5. Identification of the methodology used to safeguard all assets and assure that they are used for
authorized purposes.
6. Comparisons of the actual expenditures to the budgeted amounts for each Federal award.
7. Written procedures related to implementing the requirements imposed by 2 CFR 200.305.
8. Written procedures for determining that the costs comply with the conditions imposed by the
Federal award.
Describe the internal controls that the developer implements in relation to the following:
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1. Verification that Federal awards are being managed in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award;
2. Actions the developer takes when instances of noncompliance are identified; and
3. The measures that the developer takes to safeguard sensitive information consistent with
applicable laws.
Budgetl Timing
The proposed HOME Layering Analyses would be managed by Tim Bretz, a Principal in the KMA Los
Angeles office. KMA proposes to complete the proposed scope of services within four weeks of
receiving the City's authorization to proceed. However, this time frame is completely dependent on
the completeness, accuracy and consistency of the information provided by the City and the
Developer. If subsequent requests for clarification are required, the time frame for completion will
need to be adjusted accordingly.
KMA will complete the scope of work on a time and materials basis with a not -to -exceed budget of
$10,000 for each of the HOME Layering Analyses identified above. These two analyses equate to a
total amount of -$20,000: If the�City requests any additional services -,including attendance -at in-person
meetings, the budget will need to be adjusted accordingly.
B. Marys Erickson Community Housing
KMA is proposing to assist the City- in evaluating proposed changes to the -affordability restrictions
imposed on the existing Eastpointe Village Apartments (Eastpointe) developed and owned by Mary
Erickson Community Housing (MECH).
Background Stritement
In 2009, MECH and the former Redevelopment Agency of the City of San Bernardino (Former Agency)
entered into a Master Agreement to acquire and rehabilitate a number of fourplexes for the purposes
of providing affordable housing. As a part of the individual development agreements for each
property, the City and the Agency provided financial assistance to MECH to assist in the acquisition and
rehabilitation costs:
1. The City provided Neighborhood Stabilization Program (NSP) funds allocated to the City HUD.
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2. The Former Agency provided Low and Moderate Income Housing Set -Aside (Set -Aside) funds.
Subsequent to the execution of the Master Agreement, the following occurred:
1. The MECH began acquiring units in 2009 and had completed the acquisition of 52 units by Fall
2011.
2. On February 1, 2012, all the redevelopment agencies in California were dissolved, which
stopped the acquisition of additional units.
3. Post dissolution, a number of legal issues arose related to the transfer of the Former Agency's
housing assets to Affordable Housing Solutions (AHS), a City -Owned Non -Profit. As a result, the
City and AHS defaulted on a signed contract with MECH for the refinancing of the project in
May 2012.
4. In August 2012 the City filed for Chapter 9 Bankruptcy.
5. Although attempts to resolve the outstanding issues have not progressed substantially over the
past six years, MECH still wishes to refinance the project.
Proposed Scope of Services
The purpose of the KMA analysis is to assist the City with MECH's proposed refinancing of the project.
It is KMA's understanding that each of the 52 units is restricted to households earning 50% of the Area
Median Income (AMI). However, as part of the proposed refinancing, both the City and MECH would
like to increase the income levels for a number of the units in an effort to enhance the economic
viability of the project.
KMA proposes to review the project's current income and operating statements and to subsequently
prepare a cash flow analysis to identify an affordability mix that balances the City's need for affordable
housing and the project's economic viability. However, it is important to understand that KMA is not
proposing to opine on the legal requirements necessary to allow for the existing affordability
covenants to be modified.
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Both the City and MECH have provided information regarding the proposed project. However, KMA
will need to be provided with the following additional information in order to complete the proposed
scope of services:
1. The Master Agreement.
2. The Development Agreement for each property including the affordability covenants imposed
on each property.
Budgetl'Fiming
The proposed analysis would be managed by Tim Bretz. KMA proposes to complete the proposed
scope of services within five weeks of receiving the City's authorization to proceed. However, this time
frame is completely dependent on the completeness, accuracy and consistency of the information
provided by the City and MECH. If subsequent requests for clarification are required, the time frame
for completion will need to be adjusted accordingly.
KMA will complete the scope of work on a time and materials basis with a not -to -exceed budget of
$10,000. If the City requests any additional services, including attendance at in-person meetings, the
budget will need to be adjusted accordingly
Ce Frazee Property Analysis
KMA is proposing to assist the City in evaluating a request by Frazee Community Center (Frazee) to sell
two properties that have the following characteristics:
1. The properties have outstanding loans that were provided by the City using with HOME funds;
and
2. The two properties have significant rehabilitation needs.
Background Statement
In 2002, Frazee received a "project" from the City consisting of three scattered site properties with a
total of 12 units. In 2004, Frazee received another "project" from the City consisting of four scattered
site properties with a total of 11 units.
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The City utilized HOME funds to provide forgivable loans with the following terms:
1. The City provided a $212,750 loan under the 2002 HOME Loan Agreement, and a $527,885 loan
under the 2004 HOME Loan Agreement.
2. Each HOME Loan carries a 25 -year loan term.
3. The HOME Loans do not bear interest.
4. The HOME Loans are forgiven at a rate of 1/25 per year from the date of each promissory note
if Frazee is performing in compliance of the HOME Loan Agreements.
Over the past several years, Frazee has experienced leadership and organizational difficulties. As a
result, some of the properties are suffering from significant disrepair. Furthermore, two of the
properties, 1379 Arrowhead (Arrowhead) and 162 West Wabash (Wabash), have become vacant, and
are currently boarded up. Additionally, all of the properties in Frazee's portfolio have a number of
liens for code violations, nonpayment of fees, and some properties have delinquent property tax
payments.
Frazee recognizes that -they have not been performing in compliance with the HOME Loan Agreements.
At this time, Frazee is making the following proposal to the City:
1. Frazee is proposing to sell the Arrowhead and Wabash Properties to Foothill Aids Project (FAP).
FAP currently operates a facility in San Bernardino.
2. Frazee is also requesting that the City forgive the HOME Loans at 50% of the rate allowed in the
HOME Loan Agreements. Frazee contends that this 50% reduction in loan forgiveness is
sufficient to correct for their non-compliance with the Home Loan Agreements.
Proposed Scope of Services
The purpose of the KMA analysis is to assist the City in evaluating Frazee's request to sell the
Arrowhead and Wabash properties. In addition, KMA will assist the City in evaluating the operating
feasibility and loan forgiveness request for all of the Frazee properties. Specifically, the City is
requesting a KMA analysis and recommendations regarding the following items:
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1. Does KMA consider Frazee's requests to be fair and reasonable for the City? The City would like
KMA's opinion regarding the current HOME Loan forgiveness provisions as well as Frazee's loan
forgiveness request.
2. The City would like KMA to review the distribution of sales proceeds from the Arrowhead and
Wabash Properties to determine if the allocations are fair and reasonable to the City.
3. The City would like to know if there will be sufficient sales proceeds from the sales of the
Arrowhead and Wabash Properties to pay off all current liens.
4. The City would like recommendations regarding appropriate amounts for the operating and
replacement reserve accounts.
Information Needs
Both the City and Frazee have provided information regarding the proposed transaction. However,
KMA will need to be provided with the following additional information in order to complete the
proposed scope of services:
1._ A list of the liens and corresponding amounts currently in place on each of Frazee's properfies.
2. A physical needs assessment or the amount of rehabilitation required for each property.
Budget ming
The -proposed assignment would be managed-byTim-Bretz.—KMA proposes to complete the proposed
scope of services within six weeks of receiving the City's authorization to proceed. However, this time
frame is completely dependent on the completeness, accuracy and consistency of the information
provided by the City and Frazee. If subsequent requests for clarification are required, the time frame
for completion will need to be adjusted accordingly.
KMA will complete the scope of work on a time and materials basis with a not -to -exceed budget of
$15,000. If the City requests any additional services, including attendance at in-person meetings, the
budget will need to be adjusted accordingly.
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D. HOME Investment Partnership Policies and Procedures Manual
January 3, 2019
Page 1.8
KMA proposes to prepare a draft HOME Policies and Procedures Manual (Manual) that will include the
following:
1. An overview of the federal HOME Program and the City's HOME Program;
2. A discussion of the HOME Program Requirements;
3. A summary of the procedures of the City's HOME Program administration duties;
4. A summary of the procedures for project implementation using HOME funds; and
5. A summary of the procedures for on-going monitoring.
6. The Manual will also include the following attachments, as needed:
a. Methods of Procurement;
b. Underwriting and Subsidy Layering Guidelines;
C. Rehabilitation and Construction Guidelines; and
d. Cost Allocation Procedures.
KMA will provide the draft Manual to City staff for review after which the Manual will be finalized.
Information Needs
In order to complete the draft Manual, KMA will need the following information:
1. A link to the City's current Consolidated Plan;
2. A summary of the roles and responsibilities of the City staff in regard to the HOME Program,
including the role of consultants, outside legal counsel, etc.
3. A summary of the process used by the City to select projects, manage the IDIS process, disburse
funds, monitor construction and lease -up activities as well as ongoing monitoring.
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4. Any policies and procedures that are used by the City regarding construction and rehabilitation
of affordable housing projects.
5. Any write-up the City has regarding methods of procurement.
BudgeflUming
The proposed assignment would be managed by Julie Romey. KMA proposes to complete the
proposed scope of services within six weeks of receiving the City's authorization to proceed. However,
this time frame is completely dependent on the completeness, accuracy and consistency of the
information provided by the City. If subsequent requests for clarification are required, the time frame
for completion will need to be adjusted accordingly.
KMA will complete the scope of work on a time and materials basis with a not -to -exceed budget of
$25,000. If the City requests any additional services, including attendance at in-person meetings, the
budget will need to be adjusted accordingly.
IV. PROPOSED SCOPE OF SERVICES (FISCAL YEARS 2019-20 AND 2020-21)
The specific assignments- for Fiscal Years 2019-2020 and 2020-2021 have yet to be -identified However, --
the City anticipates that future assignments will be similar in nature to those assignments identified for
Fiscal Year 2018-2019 and outlined in the sections above. These assignments will likely include HOME
layering analyses, financial restructuring analyses and/or the financial analysis of new affordable
housing projects.
In addition to the scope of services identified for the specific projects for 2018-2019, KMA also has
extensive experience providing the following services:
A. Layering and Leveraging Analyses
KMA prepares market and financial analyses to quantify the appropriate level of client assistance to a
project. We evaluate the impact of burdens and incentives on affordable housing programs and advise
on all aspects of project structuring, including the use of available outside funding and assistance
sources. KMA has extensive experience preparing HOME layering analyses under the HOME final rule.
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B. Developer Solicitation/Selection
January 3, 2019
Page 20
KMA assists clients in the evaluation and selection of developers for affordable housing projects. The
evaluation typically includes a thorough review of the developer's prior experience and that of the
development team, its financial strength and property management expertise.
C. Inclusionary Housing Programs
KMA analyzes the financial impact associated with requiring private sector residential developers to set
aside rental and ownership units for very -low, low, and moderate income households. These analyses
quantify the net economic detriment created by the inclusionary requirement, after consideration of
the benefits associated with various incentives being offered by public entities. KMA has assisted
clients in drafting inclusionary housing ordinances and implementation documents, as well as
participating in the public hearing approval process.
D. Policies and Procedures Manuals
KMA has written policies and procedures manuals for clients to ensure compliance with HOME
Program regulations as well as developed programs for the use of HOME Program funds. In addition,
KMA has prepared policies and procedures manuals to implement inclusionary housing programs and
NSP programs.
F. 5B 34a hou using Reports
KMA has prepared a template to be used by Housing Successor staff to prepare the required annual SB
341 report. In addition, KMA also prepares SB 341 reports for housing successor agencies.
F. Compliance Monitoring
Affordable rental housing is typically funded with a variety of layered funding sources. These sources
impose income and affordability restrictions that require clients to monitor compliance with the
relevant affordable standards. KMA's experience includes structuring housing projects funded with
multiple assistance sources and monitoring the completed projects to ensure continuing compliance
with the income and affordability covenants.
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G. Residual Receipts Calculation and Compliance
KMA has assisted clients in the evaluation of affordable housing operations and ensuring compliance
with residual receipts loan repayment terms. The evaluation typically includes a review of the annual
audited financial statements and operating statements to determine the amount of any residual
receipts payments that are due.
V. FEES
KMA is proposing to enter into a three-year contract for consulting services with the City. The specific
projects outlined for Fiscal Year 2018 - 2019 have already been identified by the City. KMA estimates
the total fee required to complete the scope of services for the four financial analysis projects at
$45,000. Additionally, KMA proposes to prepare a HOME Policies and Procedures Manual for $25,000.
As such, the total budget for Fiscal Year 2018 — 2019 is estimated at $70,000.
The City anticipates the need for consulting services for similar financial analysis projects during the
remaining two years of the contract — Fiscal Year 2019-2020 and Fiscal Year 2020-2021. Given the
unspecified nature of the future projects the City may request KMA to analyze, KMA proposes that the
$45,000budget_required for the specific financial analysis projects -identified forfiscal Year 2018-2019
be applied to the remaining two years of the three-year contract. As such, KMA proposes to enter into
an annual contract amount of $45,000 for these two years. This results in a total three-year contract
amount of $160,000 ($70,000 for the first year and $45,000 for each of the next two years).
KMA proposes the#gllowingipracedure to proceed with future assig-nments=that-have not -already been
identified:
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• A City staff person will contact KMA with a description of the engagement.
Shen
• KMA will assign the engagement to the appropriate KMA principal.
tep 2
• The KMA principal will prepare a proposed scope of work, request for
information, description of deliverables, a timeline, and a budget for the
Step City's approval.
• Once KMA has received approval from the City to commence work on the
engagement, KMA will prepare the work product in accordance with the
Step 4 agreed upon scope of work.
• Throughout all engagements, KMA staff will be available for in-person
Step 5 meetings and conference calls with staff, and public meetings as requested.
1W
Prior to commencing work on any assignment, KMA will provide a budget for the City's approval. The
billing rate schedule for Fiscal Year 2018 - 2019 is presented in the following table:
Chairman & President
$280.00
-f, ana-ing=Principals*
$280.00
Senior Principals*
$270.00
Principals*
$250.00
Managers*
$225.00
Senior Associates
$187.50
Associates
$167.50
Senior Analysts
$150.00
Analysts
$130.00
Technical Staff
$95.00
Administrative Staff
$80.00
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*Rates for individuals in these categories will be increased by 50% for time spent in court testimony.
Monthly billings for staff time and expenses incurred during the period will be payable within thirty
(30) days of invoice date. Directly related job expenses will be billed at 110% of cost.
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