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95-21728 Reso " " , , . /"" , ~ RESOLUTION N!! 95-21728 " A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA APPROVING AND ADOPTING REVISED GUIDELINES FOR THE MUL TI- FAMILY HOUSING REHABILITATION PROGRAMS. WHEREAS, the City Commission on July 22, 1992 reviewed and approved guidelines for the Multi-Family Housing Rehabilitation Programs, which are administered by the City using funds provided by the U.S. Department of Housing and Urban Development; and WHEREAS, a need exists to revise these guidelines, in order to, among other things facilitate providing assistance to buildings which are occupied by tenants; and WHEREAS, the City Administration, following an extensive citizen participation program, has revised the guidelines and recommends approval and adoption of the attached revised guidelines; and WHEREAS, the City's Loan Review Committee reviewed and approved in concept these revised guidelines and recommends their adoption by the Mayor and City Commission. NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA that the attached revised guidelines for the City of Miami Beach Multi-Family Housing Rehabilitation Programs, are hereby approved and adopted. PASSED AND ADOPTED THIS ATTEST: CAH\\RESO\MFGUIDE,RES FORM APPROVED LEGAL DEPT. B~ Date -3.j?"1)..'lL. ., CITY OF MIAMI BEACH MULTI-FAMILY HOUSING REHABILITATION PROGRAMS GUIDELINES ADOPTED BY THE MAYOR AND CITY COMMISSION ON SEPTEMBER 27, 1995 For Information Contact: Housing and Community Development 1700 Convention Center Drive Miami Beach, FL 33139 (305) 673-7260 FAX: 673-7772 " TABLE OF CONTENTS CHAPTER PAGE Introduction to the Rehabilitation Programs . . . . , . . . , . . . . . . , . . . , . , . . , , , , , . . . , , ., 1 I Section I - General Program Requirements ,..,.".,..,."...,...".,.,...,., 2 Section II - Application for Funding ..".,."..",...,..,..,.,...,."...",., 3 Section III - Eligible Costs Under the Program ..."."......,.....,."...",., 5 Section IV - Terms and Conditions of the Programs, . . . . . . . . . . , . . , . , . . , . , . , . , ., 6 Section V - Payment Procedures . . , , , . . . . , , . . . . , . . . , . . . , . . . . . . . , , , . . , . . , , ., 8 II Specific Program Requirements .."...."....,....,.,...".....,.,.....,., 1 0 Section I - Matching Grant Program ....."....,.,.,......,.,...",......,., 1 0 Section II - Interest Subsidy Program ....,...,.,.....,.,....,....".,...,.., 10 III Defaults .,.........,.,....."....,.,.....,...,.,.,..."..."......".. 13 IV Tenant Relocation Procedures ".,....,...,.........,...,....,........... 14 V Loan Review Committee....,.."..,.".,.,.."....,........."..,."... 15 VI Definitions ,..."..,.."....,.....".,...,...........,................ 17 Exhibit "A" Federal and Other Requirements "",..,..",......",.,..,.,.,.. 18 City of Miami Beach Multi-Family Rehabilitation Program Guidelines Introduction The City of Miami Beach is an entitlement recipient of federal Community Development Block Grant (CDBG) funds from the U.S, Department of Housing and Urban Development (HUD). Using these monies the City provides funds for physical and capital improvements, economic development initiatives, park and recreation improvements and activities, social/public services, and affordable housing initiatives, Since 1982 the City's Multi-Family Housing Rehabilitation Programs which are funded through the Block Grant and administered by the Housing and Community Development Division (HCDD) of the Development, Design and Historic Preservation Services (DDHPS) Department, have provided financial assistance to property owners to encourage them to upgrade the existing rental housing stock in Miami Beach, These funds are provided in one of two ways: either by subsidizing the interest on a bank loan to reduce the market interest rate down to a six percent (6%) rate, or alternatively, a matching grant for up to one-half the cost of the rehabilitation. To date, more than 40 buildings containing over 1,100 rental units have been, or are currently being renovated, Federal funds in the amount of 6.7 million dollars have been invested, leveraging 21.1 million dollars of private funds (a leverage ratio of 3.15:1). Since the programs previously were designed primarily as an economic development tool, they focused on vacant, boarded-up structures and excluded any building which was occupied, Currently, there are few, if any, vacant buildings left in the City. In the North Beach area, the only properties eligible for rehabilitation are partly or fully occupied. According to the 1990 Census, there are 56,426 housing units in Miami Beach, of which 49,305 are occupied. Of these occupied units, 72% are occupied by renters, Additionally, 63% of the households in Miami Beach are classified as low/moderate income, eaming at or below 80% of the median income of Dade County. Further, according to the three year Consolidated Plan adopted by the Miami Beach City Commission on July 26,1995, it is estimated that 30-35% of the City's housing stock needs some type of repairs to meet City codes, and are suitable for rehabilitation; of these units approximately one-half have minor repair issues while the balance have more significant items which should be addressed. Thus, one of the long-term objectives contained in the City's Three Year Consolidated Plan is "(t)o increase the availability of standard housing through the rehabilitation of the existing housing stock." The City has determined that the Guidelines for the Multi-Family Housing Rehabilitation Programs need modification to reflect current needs within the City. Thus, the HCDD, and the City's Loan Review Committee (LRC), with the input of a number of concemed organizations and private citizens, have worked together to make the needed revisions to these Guidelines. Some of the changes are described generally as follows: . It is now possible for the owner of an occupied building to receive rehabilitation assistance. The City may help defray the costs of temporarily moving the tenants during the rehabilitation. (The City's program is designed to minimize permanent displacement.) . The maximum subsidy available for a project has been increased from $7,500 per residential unit to $10,000 per unit. . The term of affordability is three (3) years, Fifty-one percent (51 %) of the units can be rented only to persons earning 80% or less of the Area Median Income. . The LRC has been expanded from five (5) to nine (9) members, and is comprised of representatives of four (4) lenders with offices in Miami Beach; three (3) residents of Miami Beach, one each representing the South Beach, Mid-Beach, and North Beach sections of the City; the City's Finance Director; and the City Manager or his/her designee, These Guidelines are subject to change, In the event of any conflict between the Guidelines and any federal law or regulation, the federal law or regulation will prevail. City of Miami Beach Multi-Family Rehabilitation Program Guidelines 1 CHAPTER I Section I General Proaram Reaulrements 1. Prooertv Qualifications Any property to be considered for assistance by the City under the Matching Grant Program or the Interest Subsidy Program must be located within the City limits of Miami Beach, and preferably should be located within one of the designated Community Development Target Areas. In addition, the property will be required to meet any additional requirements set by the City, The Community Development Target Areas are described as follows: a, North ShorelNormandy Isle Target Area - The area of the City limited on the north by 87th Terrace; on the west by Byron Avenue south to 85th Street, then west along 85th Street to Hawthorne Avenue; and south along Hawthorne Avenue to nth Street, then east on nth Street to Dickens Avenue and south along Dickens Avenue to Indian Creek Drive and south along Indian Creek Drive to 67th Street on the west; 67th Street east to Collins Avenue, north on Collins Avenue to 71st Street, East on 71st Street to the Atlantic Ocean. In addition, the area also includes Normandy Isle south of the Normandy Waterway, but excluding the portion enclosed by Trouville Esplanade, Bay Drive, Rue Notre Dame and the Normandy Waterway. b. Flamingo Target Area: The area of the City limited on the north by 41st Street, from the Atlantic Ocean, west to Pine Tree Drive; then south along Pine Tree Drive to 34th Street, west along 34th Street to Sheridan Avenue, then south along Sheridan Avenue to its conjunction with Pine Tree Drive and continuing south along Pine Tree Drive to Dade Boulevard, west along Dade Boulevard to Biscayne Bay; then south along the shoreline of Biscayne Bay to Govemment Cut on the south; east along Government Cut to the Atlantic Ocean on the east; then north along the Atlantic Ocean to 41 st Street. In addition, the area also includes the part of Census Tract 40 bounded on the north and west by 41st Street (Arthur Godfrey Road) and on the east and south by the Biscayne Waterway Canal and continuing along the shoreline of Biscayne Bay to the Julia Tuttle Causeway. The proposed rehabilitation of properties located outside the Target Areas will be subject to special environmental site review and clearance under the rules of HUD. In order to be considered for participation in one of the programs a propertY must contain, or the applicant must propose, a minimum of five (5) living units, each with a minimum of 400 square feet. If the proposed project is a mixed-use property, containing both residential and commercial uses, any assistance provided under these Guidelines can be utilized only for rehabilitation of the residential portion. After rehabilitation, the residential portion of such mixed-use property must be used only for rental housing. At least fifty-one percent (51 %) of the units in the property can be rented only to low and moderate income persons at affordable rents (as defined in Chapter VI). This requirement applies for three (3) years after the date of issuance of a Final Certificate of Occupancy, or Certificate of Completion, as applicable. 2. Aoolication Review a. Based on the information contained in the application, the City's Housing and Community Development Division (HCDD) shall make a determination as to whether or not the applicant and the property are eligible for participation under either the Matching Grant or the Interest Subsidy Program, as set forth in these Guidelines. b. The application will then be reviewed by the City's Loan Review Committee (LRC) and the amount of funds required will be estimated by the HCDD, based on the preliminary project City of Miami Beach Multi-Family Rehabilitation Program Guidelines 2 cost estimate, and subject to the limits defined elsewhere in these Guidelines, If the application is recommended by the LRC, it will then be submitted to the Mayor and City Commission for consideration. If approved by the Mayor and City Commission, and upon compliance with and review by the HCDD of design requirements, drawings, specifications, and other applicable documents and requirements, an agreement will be executed between the City and the Applicant. c. Only those applications which have been reviewed and recommended by the LRC, and approved by the Mayor and City Commission, shall be eligible for funding under the City's Programs. 3. Minimum and Maximum Award Amounts - In order to qualify for funding hereunder, the minimum total rehabilitation cost estimate amount must be at least $3,000 per dwelling unit, and not less than $25,000 in the aggregate for all dwelling units in the project. The maximum amount which may be approved is $10,000 per dwelling unit. The actual amount of grant or subsidy funds awarded is subject to the discretion of the LRC, within the limits set by these Guidelines, and subject to the funding available for the Programs. Section II ADDllcation for Fundina 1. ADDlication Process An application for rehabilitation assistance must include the following: a. Completed application form. b, Proof of ownership (copy of a deed or other acceptable proof of ownership of the property acceptable to the City, or a contract of sale, however a funding agreement may not be executed until applicant obtains fee simple title), c. Organizational documents and certificate of good standing (if other than individual ownership). d, Legal description of the property, e. Description of proposed rehabilitation work - A written description of the rehabilitation work intended to be done to renovate the property, identifying the deficiencies to be corrected. f. An itemized cost estimate, prepared by a licensed architect or engineer, showing the estimated construction cost for the work to be performed, which is based on the scope of work and technical specifications contained in the work write-up, g, Two (2) sets of plans, drawn to scale, of the proposed project, including a site plan, floor plans, elevations, specifications and a certified survey. h, Photographs of the property, including exterior shots of all sides of the building and interior shots of the units, showing the need for work to be performed and the specific areas to be improved, i. A non-refundable application fee of $250. . (A request for waiver of this fee will be considered from qualified not-for-profit applicants.) City 01 Miami Beach Multi-Family Rehabilitation Program Guidelines 3 j, If the property is occupied at the time the application is submitted the applicant must submit a tenant roll, Additionally, the applicant must submit for each tenant the rent currently paid, with an indication as to whether utilities are included, family size, family income, and any other information determined necessary by the HCDD to assess the requirements for temporary relocation, 2. Review of Aoolications bv the City The HCDD will review the application documents and make an initial determination as to whether or not the applicant and the property are eligible for one of the programs set forth in these Guidelines. The application documents will also be sent to the City's Planning and Zoning Director, Chief Building Official, Code Compliance Supervisor and ADA Coordinator for review and comment. If eligible, the application will then be reviewed by the LRC, Only applications which have been reviewed and recommended by the LRC will be presented to the Mayor and Commission for approval. If the City Commission approves the application and funding agreement, the HCDD will issue a funding commitment, and a reservation of funds will be made for the project. The funding agreement shall be in such form as may be recommended by the City Attorney. However, before an agreement is executed by the Mayor and City Clerk, the HCDD must receive and approve the following: a, If the property was constructed prior to 1945, then written approval from the State of Florida Historic Preservation Officer (SHPO) will be required. For this purpose, the applicant will have to provide working drawings, photographs and certification forms, and any other information as determined necessary by the SHPO. b, A copy of final plans and specifications for the rehabilitation of the project, approved by the City's Building Department, which include proof of obtaining all variances required, and compliance with all local laws, codes and standards, Plans must also comply with the requirements of the City's Planning and Zoning Department, and the City's ADA Coordinator, c. Building permits must be obtained, from the City's Building Department, as required by applicable City Ordinance, Also, any other necessary permits and applicable approvals from any other governmental authorities must be obtained, d, A copy of an executed construction contract entered into by the applicant and a licensed General Contractor, which includes the following: (1) Roles and responsibilities of all parties; (2) Construction schedule (commencement and completion dates) with the clause described hereinafter; (3) Contract price; (4) Scope of work; (5) Provisions for inspections and payments to the contractor for the work completed; (6) Provisions for a holdback of funds; (7) Change order procedures; (8) Procedures for resolving disputes; (9) References to any work which will be performed under warranty (including the terms and conditions of such warranties); (10) All essential construction documents, such as the work write-up and technical specifications; and (11) Reference to all applicable federal regulations and standards. e. Evidence, satisfactory to the City's Risk Manager, of proper insurance coverage, 1. A revised cost breakdown, to include direct and indirect costs of the proposed work. If requested, the applicant must provide the HCDD with a structural report of the building prepared by a Professional Engineer, along with a signed statement that the final cost estimate provides for any necessary structural repairs to the building. g. Proof that the property has been inspected by the City for building / code violations, City of Miami Beach Multi-Family Rehabilitation Program Guidelines 4 h, Evidence that the building's roof is in weather-tight condition and that the building is free of live infestation of termites. If such evidence cannot be provided, the applicant must assure that the items will be corrected as part of the rehabilitation project. i, The applicant must provide assurances that it is not delinquent in its legal and financial obligations and/or payments on the property with the City, j, The applicant will be responsible for the costs of recording the agreement and related documents with the Clerk of the County Court. k, Any other requirements determined necessary by the City. Section III Eliaible Costs Under the Proarams 1, General The financial assistance available under these Programs is designed to assist the renovation of multi-family buildings that need to be brought into compliance with applicable codes and ordinances, rules and requirements, including, but not limited to, HUD Housing Quality Standards, the South Florida Building Code, and the City of Miami Beach housing codes and ordinances, 2. Eliaible Costs The eligible uses of funds under the Programs are the following: a, Construction - Includable costs for labor and materials should be considered in the following order of priority. At least 80% of the total project cost must be attributable to repairs to remedy code violations, current or incipient. (1) Current or Incioient Violations - Improvements to correct violations or conditions which may, in the opinion of the City, develop into hazardous conditions or code violations. (2) Good and Readilv Maintainable Condition - Improvements necessary to put the property and facilities in a condition which requires a minimal amount of maintenance, and when appropriate, improvements which conserve energy. (3) General Prooertv Imorovements - Improvements which are in addition to those required by applicable codes and ordinances, but which are incidental to the repairs being done to remedy code violations, These improvements may be considered appropriate, provided they are economically practical and in the public interest. Such costs shall not exceed twenty percent (20%) of the total rehabilitation costs, At least b, Architectural - Reasonable fees paid for professional services in preparing work write-ups, cost estimates, working drawings, specifications, supervision and other designated tasks. c. Permit Fees - Those fees paid to the City's Building Services Division for permits necessary to undertake the work outlined in the application, d, Aooraisal Fees - If required by the City. e. Continaencv - An amount not to exceed ten percent (10%) may be included in the cost estimate for any unforeseen but eligible construction costs. City of Miami Beach Mu~I-Famlly Rehabilitation Program Guidelines 5 f, Temoorarv Relocation - Fifty percent (50%) of "eligible" expenses associated with relocating existing tenants to temporary lodging and subsequently retuming them to the property upon completion of the project, as well as "eligible" increases in expense levels incurred by the tenants during the period of temporary displacement. "Eligible" expenses will be determined in accordance with the provisions of Handbook 1378: "Tenant Assistance, Relocation and Real Property Acquisition", issued by HUD, as amended. 3. Ineliaible Costs The following costs or expenses are not eligible uses of funds under the Programs: a. Refinancing of existing mortgages. b. Purchase of the property. c. New construction. d. Purchase, installation or repair of fumishings, e, Payment of delinquent taxes, utility bills, fines, insurance premiums, deductibles or other similar expenses. The applicant is responsible for bringing these payments current and satisfying in full any liens, charges or assessments against the property, prior to submission of the application to the City Commission. Section IV Terms and Conditions of the Proarams The applicant shall agree to abide by all applicable City, State and Federal laws and regulations in regard to the Programs,including, but not limited to, the following terms and conditions: a. Work Write-uos - The Applicant will submit clearly written, well-organized work write-ups, which precisely define the scope of the rehabilitation work to be undertaken. The project's scope of work and technical specifications should be included or incorporated by reference in the work write-up. b. Cost Estimates for Work Soecified - The Applicant must provide to the City an estirnate of reasonable project costs, prepared by a licensed architect or engineer, and based on the scope of work and technical speCifications contained in the work write-up. c, Contractor Selection - The applicant may select hislher own contractor and does not have to use formal competitive bidding procedures, However, the applicant must secure written estimates from three (3) qualified eligible contractors. The estimates must be based on work write-ups as described above, The applicant must provide the City with copies of the contractor's estimates and all work write-ups for the City's review. The City's Building Official will prepare an estimate of the cost of the work as described in the work write-up, and shall review the estimates provided by the selected contractor for reasonableness of cost. The contractors bid that is selected cannot exceed the City's estimate by more than 10%, Contracts must specify a completion date within a reasonable period of time, and must include a clause reqUiring the contractor to pay at least one tenth of one percent (0.10%) of the value of the job per day for each day the project completion is delayed beyond the agreed-upon completion date. d. Ineliaible Contractors - The applicant may not award any contract for rehabilitation work to be paid for in whole or in part with federal grant funds to any contractor or sub-contractor who, at the time of contract execution, is ineligible under the provisions of any applicable City of Miami Beach Multi-Family Rehabilitation Program Guidelines 6 regulations issued by the Secretary of labor or the federal govemment to receive such award, The City will confirm whether the contractor is included in the list of ineligible firms. e. lead-Based Paint Reauirements - The use of lead-based paint is prohibited, Federal regulations require that, in the event lead-based paint is found in a property assisted under the Programs, appropriate testing and abatement procedures must be undertaken by the applicant at his/her expense, f. Federal labor Standards - All laborers must be paid wages that are not less than those contained in the official wage determination of the Secretary of labor for each classification of work (Davis-Bacon Act). Any property containing eight (8) or more units under the Community Development Block Grant Program (CDBG) must comply with all Federal Labor Standards provisions. A pre-construction conference must be held by the City with the contractor, all sub-contractors, and the applicant in order to address the extent of the work to be performed, the schedule, special conditions, labor standards provisions and any speCific concerns or questions any of the parties may have, g, Comoletion of Work - The applicant will also assure that the rehabilitation work will be carried out promptly and efficiently through a written contract let with the concurrence of the City, and completed within a specified time as established by the architect and/or engineer and the City. Failure to pursue the project diligently may cause a default hereunder. In the event of construction cost overruns, any additional funds needed to complete the rehabilitation must be provided by the applicant. h. Benefit to low and Moderate Income Persons - Fifty-one percent (51%) of the units, after rehabilitation, can be rented only to low and moderate income persons who eam at or below 80% of the Area Median" Income (AMI), at affordable rents, as defined in Chapter VI. This requirement applies for a period of three (3) years after the date of issuance of a Final Certificate of Occupancy or Certificate of Completion, as applicable, i. Transfer of the Prooertv - If the property is sold, transferred or converted to condominium use, within the three (3) year period of affordability as defined above, following the issuance of a Final Certificate of Occupancy or Certificate of Completion, the full amount of the funds awarded by the City as a matching grant or as an interest subsidy will immediately become due and payable to the City upon demand. The City may, at its option, permit such transfer, provided that the purchaser satisfies the City that the units will be maintained under the same terms and conditions for the full period as specified in the original agreement. The applicant shall notify the City in writing of his/her intention to transfer the property and shall permit the City to review all applicable documents in order to ensure compliance with this requirement. j. Reoortina - Funding recipients under these, Programs must submit to HCDD annual reports regarding the property and its occupants, detailing family size and income levels in form and substance acceptable to the City. k. Access to Prooertv and Records - Designated personnel of the City and HUD shall have access to the property and shall have the right to inspect the property, rehabilitation work, contracts, materials, equipment, payrolls and all records relative to the project. I. Prooertv Insoection - The applicant shall retain the services of a qualified inspector (Le., licensed architect or professional engineer) who must periodically inspect the property during the rehabilitation project and certify to the City that the percentage of work has been completed in accordance with the approved plans and specifications. The American Institute of Architect's standards, or an approved equivalent, must be used for such certifications, The City must review and approve each request for payment by the contractor for work completed, The applicant shall not issue payment to the contractor unless the City has reviewed and approved the contractor's request for payment. City of Miami Beach Multi-Family Rehabilitation Program Guidelines 7 m. Maintenance of the Prooertv - The dwelling units in the project shall be kept in good condition and repair and shall be fully tenantable. No dwelling unit therein shall be removed or demolished. The Applicant shall complete or restore promptly and in a professional manner any dwelling unit which may be damaged or destroyed therein and shall pay when due all claims for labor performed and materials fumished to the project. n, Insurance - The Applicant shall maintain hazard, liability and flood insurance on the property to be rehabilitated, as required in accordance with the requirements of the City's Risk Manager. o. Prooertv Alterations - The Applicant shall assure that no changes will be made to the exterior of the property nor to the interior of the assisted units for at least the full term of affordability unless such proposed changes are approved in writing by the City. If any changes are made without the prior written consent of the City, the full amount of the funds supplied by the City will become due and payable immediately upon demand, This section is in no way intended to impede the Owner's responsibility to perform normal maintenance on the property, p. Conflict of Interest - All applicants must comply with the provisions of 24 CFR Part 570.611 regarding conflicts of interest. No member of the City Administration or any City employee, public official, or member of the Federal, State, Local or County Govemment, who exercises any functions or responsibilities in connection with the administration of the Programs or approval of the project, may have any interest, direct or indirect, in the proceeds of the payment hereunder, or in any contract entered into by the applicant for the performance of the work paid for in whole or in part with these federal funds. HUD has the authority to grant exceptions but the regulations do not provide anyone with a right to an exception, In order to ensure that HUD-assisted rehabilitation is carried out in accordance with generally accepted construction standards and that rehabilitation funds are expended economically and efficiently, the City must be advised immediately of any and all suspected or apparent conflicts of interest. q. Eaual Occortunitv - The applicant shall abide by all federal, state or local regulations relative to equal opportunity to all persons, without discrimination as to race, color, creed, religion, national origin, sex, sexual orientation, marital status, age, handicap or familial status. r. Affirmative Marketina - Applicants are required to market all units in projects assisted under these Guidelines in accordance with the City of Miami Beach's "affirmative marketing procedures" as required by HUD. Section V Payment Procedures Funds Disbursement After a funding agreement and related documents have been executed, and a Notice to Commence Construction has been issued by the City, the approved funding amount will be disbursed as follows: Durine the construction chase - A payment may not be issued more often than once a month. The amount of each payment will be calculated as follows: 90 per cent of the value of work completed to date, less the previous payments made (as certified by the Owner's Architect using an AlA payment certification form, and confirmed by the City's Building Services Division), The City's payment will be in the same proportion to the cost of the work that has been completed since the work for which the City has previously made payment as the City's funding commitment bears to the total estimated cost of the project. Mulll-Famlly Rehabilitation Program Guidelines City of Miami Beach 8 Payments under the matching grant program will be made directly to the owner, Payments under the interest subsidy program will be submitted to the holder of the interest escrow account. The final ten percent (10%) of the City's funds shall be paid upon the completion, approval and acceptance of the rehabilitation work and related documentation by all the govemmental agencies and authorities having jurisdiction over the project, and as further set forth in these Guidelines, including, but not limited to, the following: a. Approval and acceptance of the rehabilitation work by all the governmental agencies and authorities having jurisdiction over the project, including the issuance of a Certificate of Completion or Certificate of Occupancy, as applicable, " b. Receipt and approval by the HCDD of all documentation for compliance with Federal Labor Standards. c. Receipt and approval by the HCDD of a certified statement showing that the property is free and clear of mechanic's, materialmen's or any other type of liens or obligations relating to the rehabilitation of the property, Items (b) and (c) must be submitted by the applicant no later than thirty (30) days after the date that a Final Certificate of Completion is issued. Multi-Family Rehabilitation Program Guidelines City 01 Miami Beach 9 CHAPTER II SPECIFIC PROGRAM REQUIREMENTS Section I - Matchlna Grant Proaram 1. General The Matching Grant Program provides direct grants to property owners in order to rehabilitate existing buildings and expand the supply of decent, safe, sanitary and affordable rental housing. Federal grant funds will be used for the rehabilitation of multi"family rental units and will address the problem of deteriorating housing stock in the City, 2. Grants Grants are not loans; therefore, repayment is not required except as specified herein, Grant funds utilized for the Matching Grant Program are derived from the U.S, Department of Housing and Urban Development (HUD), Funds may be disbursed only for eligible activities in accordance with applicable federal regulations. Section II - Interest SubsidY Proaram 1. General The City's Interest Subsidy Program is designed to provide interest subsidies, resulting in low interest rehabilitation loans to property owners of multi-family residential properties in order to upgrade their buildings, and to make available affordable rental housing units, The City, utilizing federal funds, will subsidize the interest rates on loans made by those lenders who agree to lend pursuant to these Guidelines, 2. Interest Rates The interest rate on loans will be subsidized with federal funds received from. HUD under the Community Development Block Grant (CDBG) Program. The subsidies are intended to result in a six percent (6%) effective annual rate on the loan to the owner, The LRC may, from time to time, revise this rate. 3. Citv's Review of Aoolications Applications for participation in this program shall be submitted and evaluated in accordance with the procedures outlined herein. If an application is recommended by the LRC to the Mayor and City Commission for their approval, the amount of interest subsidy will be estimated. This calculation will be based on the present value of the subsidy required to buy down the interest rate on the loan, which amount of money, if the application is approved, will be paid to the lender on behalf of the applicant and will be depOSited in an interest-bearing escrow account with the lender, This amount will be a preliminary estimate since the applicant will likely not yet have secured the final loan terms and conditions from the lender. Only applications which have been reviewed and recommended for approval by the LRC shall be eligible for a City of Miami Beach interest subsidy, City of Miami Beach Multi-Family Rehabilitation Program Guidelines 10 4, Lender's Commitment on the Proiect Applicants must apply to a lender(s) of their choice to obtain a funding commitment for the project. The lender will, if feasible, issue a commitment letter to the applicant setting forth the terms and conditions of the loan. It shall be the applicant's responsibility to bear all costs necessary to submit a loan application to any lender and to pay for any costs incurred by the applicant if the loan application is not approved by a lender and/or the City, Reservation of City funds for approved applications will expire sixty (60) days from the date the application was approved by the LRC, unless the HCDD receives a written commitment issued by a lender, acceptable to the City as to form and content within such 60 days. 5. Final Calculation of Interest Subsidv Upon receipt of an acceptable funding commitment from a lender, the HCDD will make a final calculation of the interest subsidy required, This calculation will be based on the present value of the subsidy required to buy down the interest rate on the loan. If the amount of the subsidy is within ten percent (10%) of the amount recommended by the LRC, no further LRC action will be required, and the proposed funding commitment and subsidy agreement will be submitted to the Mayor and City Commission for consideration. 6. Estimatina Fundina The terms and conditions of the lender's commitment should be substantially the same as unsubsidized loans, including, but not limited to, such matters as submission requirements, prepayment privileges, owner's equity, credit rating of applicants, and escrow accounts. Loans shall bear the same interest rate as those for unsubsidized multi-family loans and, for the purpose of the Program, this rate shall be termed the "loan rate". The HCDD, the lender and the applicant will determine the amount of the interest subsidy payment necessary to reduce the "loan rate" to the "subsidized rate", this amount will depend on, among other things, the term of the repayment. If this final calculated amount is within ten percent (10%) of the amount recommended by the LRC and approved by the Mayor and City Commission, no further action will be required of the LRC and the Mayor and City Commission. If the commitment issued by the lender is insufficient to pay for the full cost of rehabilitation, then the work write-up and cost estimate may be adjusted downward. After adjustment and rehabilitation, however, the property must, at a minimum, conform to the applicable codes and ordinances, and any indicated requirement of additional funds must be documented to the City's satisfaction and committed to the project. 7. Loan Closinas Lenders shall be responsible for the preparation and execution of all loan closing documents, and shall notify the applicant and the City of the date and location of the closing. All closings will meet the normal and standard requirements for loans of a similar nature, as established by the lender and/or its attorneys. 8. Closina Reauirements All applications approved by a lender, the LRC and the Mayor and City Commission for participation in the Program shall be closed in strict accordance with the terms and conditions of the lender's commitment, the City's commitment, the subsidy agreement and within the time specified in those documents. City of Miami Beach Multi-Family Rehabilitation Program Guidelines 11 9. Use of the Interest Subsidv bv the Lender The interest subsidy payments disbursed by the City to the lender shall be deposited in an interest bearing escrow account at one of its offices located in Dade County, Florida, at the maximum interest rate available to lender, and shall be expended as follows: on each month that the applicant is required to make payments to the lender on the permanent loan, the lender will draw from the escrow account (to the extent amounts in the escrow account are sufficient) the amount equal to the difference between the amortized monthly payment of principal and interest based on the "loan rate" and the amortized monthly payment of principal and interest based on the "subsidized rate". Any unused balance of interest subsidy funds plus unused eamings thereon shall remain in the escrow account with the lender. Lender must execute a statement that it has no security or other interest in the escrow account. 10. Additional Eliaible Costs In addition to the eligible uses of funds as described in Chapter II, Section III when an interest subsidy is used, the following costs are also eligible: a, A reasonable and standard fee for loan points over and above the per annum interest rate charged by lender, b, Costs attributable directly to the preparation of loan instruments and any other out-of-pocket costs incidental thereto, including, but not limited to, fees for recording and filing, credit reports, photographs, surveys, inspection fees, abstracting and title reports, appraisal fees, current accruals, and legal fees, City of Miami Beach MUlti-Family Rehabilitation Program Guidelines 12 CHAPTER III Defaults 1. Defaults If any applicant or funds recipient under either Program defaults under or breaches any City or federal term or condition of one of the Programs, violates any federal, state or City law or regulation, or defaults under or breaches any term or condition of these Guidelines or of any Matching Grant or Interest Subsidy Agreement or of any loan document relating to the property at issue, the City shall be entitled to declare a default under the Matching Grant or Interest Subsidy Agreement, these Guidelines, and the Program, The City shall be entitled to pursue all available remedies, including, but not limited to, equitable, legal and injunctive relief and the retum of all monies disbursed by the City, plus interest. Any costs incurred by the City as a result of a default, including legal fees and costs in the trial court and all appellate levels, shall be paid by the applicant or funds recipient. 2, Lien Riahts of the City The executed agreement between the Applicant and the City will be promptly recorded in the Public Records of Dade County, Florida and will be a lien against the property for the term of the agreement. In the event of a default under the agreement, the full amount of funds provided by the City will be treated as a loan, and full payment to the City plus interest will be required immediately upon demand. Further, the City will be authorized to foreclose its lien on the property to recover the full amount of the money provided plus interest. 3, Cancellation and Refund of PaYments At its option, the City reserves the right to cancel and terminate a matching grant or interest subsidy award and request the retum of the unused funds and any interest thereon to the City, by sending written, certified notice of cancellation to the applicant at his/ller mailing address if: (1) for a period of 30 days after the notice to commence work is issued, the applicant shall have failed or refused to cause the commencement of physical rehabilitation work on said property; or, (2) the applicant failed or refused to complete the work within a time specified in the City's documents; or (3) the City determines that the purposes of the grant have been rendered impractical of fulfillment. 4, Default bv the Aoolicant under the Terms and Conditions of the Loan In the event any applicant defaults under any of the terms and conditions of a note, mortgage, or other loan document relating to the property at issue, including a loan document relating to a loan subsidized under the Interest Subsidy Program, the lender shall immediately notify the City of the default and the City may, at its sole option and discretion, within thirty (30) days of this notice, take whatever action is customarily permitted to bring the loan current. 5. Unused Preoaid Interest Subsidv In the event of a default by the applicant under an Interest Subsidy Agreement, any unused balance of interest subsidy funds plus any accumulated interest eamings shall be returned immediately to the City upon demand, 6. Remedies Cumulative The exercise or lack of exercise by the City of any remedy in response to any default does not preclude the City from exercising any other remedies. City 01 Miami Beach Multi-Family Rehabilitation Program Guidelines 13 CHAPTER IV Tenant Relocation 1. General If the property is occupied at the time the application is submitted the applicant must submit a tenant roll. Additionally, the applicant must submit for each tenant the rent currently paid, with an indication as to whether utilities are included, family size, family income, and any other information determined necessary by the HCDD to assess the requirements for temporary relocation, 2. Relocation Plannina In the event that temporary relocation of existing tenants is mandated by a project, the provisions of the federal Uniform Relocation Act (URA) will apply, The City's desire is to minimize displacement If a property is occupied and temporary relocation of the tenants is required during the rehabilitation or construction, the City will reimburse up to fifty percent (50%) of "eligible" temporary relocation expenses incurred by the property owner in accordance with the budget and plan submitted as part of the application and approved by the City, "Eligible" expenses will be determined in accordance with the provisions of Handbook 1378: Tenant Assistance. Relocation and Real Prooertv Acauisition, issued by HUD, as amended. The Owner must pay these expenses directly, or reimburse the tenants for their payments, and document all such expenditures carefully, Upon submittal of a detailed accounting of all such payments or reimbursements made each month for the duration of the project, the City will reimburse the owner up to 50% of those eligible expenses incurred for this purpose. 3. Assessment of Need As part of the application package for the project, the applicant is required to prepare an estimate of the number of tenants requiring temporary relocation, the household size, and type, previous rental amount, utility expenses, and the cost of temporary lodging, as well as other increased expenses associated with such temporary relocation. The Owner should also advise the City of other property they may have which could be utilized to temporarily house the tenants, Additionally, the number and type of vacant units in the subject property must be clearly identified, to permit a determination of whether relocation of tenants within the property will be feasible, or whether it will be necessary to provide temporary lodging outside the property, 4. Relocation Plan and Budaet A budget must be submitted, estimating the anticipated relocation expenditures by month for the entire period of the project. Such a preliminary plan and a relocation budget should include, the number of tenants and the period of temporary relocation necessary for the completion of the project, consistent with the project construction schedule submitted by the general contractor. Multi-Family Rehabilitation Program Guidelines City of Miami Beach 14 CHAPTER V LOAN REVIEW COMMITTEE 1. General This chapter sets forth the role and responsibilities of the City's Loan Review Committee (LRC). 2. Members The LRC shall consist of the following nine (9) members: a, The City Manager, or a designated representative, and the City's Finance Director b. Four (4) members from different private lenders with offices located in the City, appointed by the Mayor and City Commission; and c. Three residents of Miami Beach, one each from North Beach, Middle Beach, and South Beach, appointed by the Mayor and City Commission. (These zones shall be defined as follows: North Beach - the zone North of 67th Street to 87th Terrace, Middle Beach - the area from 67th Street to the Dade Canal and 23rd Street to the Ocean, South Beach - the zone from Dade Canal and 23rd Street south to Government Cut.) Members shall serve for a term of two (2) years, or until a successor is appointed. The members will elect a chairperson, who will serve at the will of the LRC, All meetings shall be called and set by the chairperson as needed, and shall be open to the public. It is anticipated that the LRC will meet on a monthly basis, but no less than quarterly. Five (5) voting members shall constitute a quorum necessary to hold a meeting or take any action, The HCDD Director or a designated representative shall act as the direct liaison between the applicant, the lender if any, the LRC, and representatives of the City, A member of the Community Development Advisory Committee (CDAC) shall also be designated . to serve as a non-voting member of the LRC, in order to facilitate communications between the LRC. ' and the CDAC. 3. Duties and ResDonsibilities of the Loan Review Committee The LRC shall: a. Study and review proposals, applications, property qualifications and the eligibility of the applicants for funding under the Community Development Block Grant Program funded Housing Rehabilitation Programs. b, If necessary, interview the applicant to obtain additional information about the proposal. c, Evaluate applications and determine which shall be recommended for approval to the City Commission. Specify time frames and any other conditions for a commitment of funds upon approval, d. Estimate the amount of pUblic funding needed to assist selected proposals and provide for the reservation of funds for those projects, e. Review final proposals which have received commitments, and recommend their reduction if required by limitations in the availability or funds. City of Miami Beach Multi-Family Rehabilitation Program GUidelines 15 '" 1. Review and make recommendations regarding any request made to the City for an assignment or material change in any of the terms of the award agreements, after loan closing or final funding commitment. g. Establish site and neighborhood standards. h. Periodically review these Guidelines, and make recommendations to the City Commission for action, i, Provide expertise and assistance to the City's Housing and Community Development Division in preparing Requests For Proposal (RFP) or Notices of Funds Availability (NO FA) or portions thereof, for the City's housing Programs including: the CDBG-funded Multi- Family Housing Rehabilitation Programs, the HOME Investment Partnerships Program (HOME), and the State Housing Initiatives Partnership (SHIP) Program. j, Review all eligible HOME and SHIP Program applications in accordance with criteria outlined in the applicable RFP or NOFA. These criteria may include items such as: total cost, extent of leveraging, cost per unit, development schedule, previous accomplishments, period of affordability, utilization of non-public funds, non-displacement, total number of units, site and neighborhood compatibility, conformity with City zoning requirements, consistency with the City's Consolidated Plan, etc. 4. Aoolicable Fees and Time Frames Any application submitted for the rehabilitation Programs will be subject to the following: a. An application fee of $250 is due at time of submission of the application to the HCDD. A request for waiver of this fee will be considered only from not-for-profit applicants. b. If the applicant under the interest subsidy program is not able to proceed with construction within the specified time, and wishes to apply to the HCDD for an extension of time, a fee of $150 is due at the time of this request. If the applicant fails to meet the program requirements during the extension period, then the City's commitment shall expire, If the applicant desires to re-apply for the funds after such expiration, a new application package and fees must be submitted to the City, and the request will be treated as a new application. 5, Aoolicabilitv of City Resolutions and Reaulations All laws, ordinances, resolutions, rules and regulations enacted by the City regarding membership, attendance, removal of members, voting and quorums pertaining to City Boards and Committees, as amended from time to time, shall apply to the LRC. Multi-Family Rehabilitation Program Guidelines City of Miami Beach 16 CHAPTER VI DEFINITIONS 1. General In construing the provisions of these Multi-Family Housing Rehabilitation Guidelines, words and terms not defined herein shall be interpreted in accordance with their normal dictionary meaning or, in the absence thereof, customary usage, Headings are only for convenience and shall not affect the meaning of any provision of these Guidelines. 2. Definitions The following are definitions of various terms as used in these Guidelines: a, Affordable rents - Rents that are computed based on 30% of the income of a family whose income equals 80% of the area median family income as defined and published by HUD, these rents include an allowance for utility expenses, b, ~ - The City of Miami Beach. c. Codes and Ordinances - Codes, ordinances and statutes of the City and Dade County, including, but not limited to, the South Florida Building Code, the Zoning Ordinance, and the Property Maintenance Standards. d, Condominium - A system of ownership of individual units in a multi-unit structure, combined with joint ownership of commonly used property (sidewalks, hallways, stairs, etc.). e. Housina and CommunitY DeveloDment Division (HCDD) - The Division of the City of Miami Beach designated to administer funds received from HUD and to administer these Guidelines. f. HUD - The U. S. Department of Housing and Urban Development. g. Lender - Lender shall be defined as an institution with one or more offices in Dade County, It may be any federal or state regulated banking institution including federal or state chartered commercial banks, mutual savings banks, savings and loan associations, municipal or publicly constituted pension trusts, insurance companies or corporations, credit unions, or other financial institutions authorized to transact business in the State of Florida and which customarily provide service or otherwise aid in the financing of mortgages located in the State of Florida, and meet the minimum capital requirements as promulgated by its respective supervisory board. h. Loan Review Committee (LRC) - A nine (9) member committee appointed by the City, responsible for the review and selection of those applications which will be recommended to the Mayor and City Commission to receive funding under the Programs. j. Low and moderate income household - A household, in which the combined income of all adults does not exceed 80% of the median income for the area, as determined by HUD. k, Multi-Familv Residential ProDertv - A property that after rehabilitation will contain a minimum of five (5) or more residential living units, After rehabilitation, all the living units will meet applicable codes and standards. I. Proarams - The Interest Subsidy Program and the Matching Grant Program which are the City's Multi-Family Housing Rehabilitation Programs referenced in these Guidelines. City of Miami Beach Multi-Family Rehabilitation Program Guidelines 17 EXHIBIT "A" FEDERAL AND OTHER REQUIREMENTS As the City of Miami Beach is providing this funding through Federal Community Development Block Grant and/or Rental Rehabilitation Program funds, all parties agree to comply with the following statutes, regulations and executive orders, as they apply, These requirements are incorporated herein by reference, ADDITIONALLY, ALL PARTIES AGREE TO COMPLY WITH ALL EXISTING FEDERAL, STATE AND LOCAL LAWS, REGULATIONS AND ORDINANCES HERETO APPLICABLE, AS AMENDED. THESE REQUIREMENTS ARE INCORPORATED HEREIN BY REFERENCE. 1. Freedom of Information and Privacv Acts - Freedom of Information Act (5 U.S.C, 552), and the Privacy Act of 1974 (5 U.S.C. 552a). 2. EaualOooortunitv - Title VI of the Civil Rights Act of 1964 (42 U.S,C. 20ood) and 24 CFR Part 1; - Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601), as amended; - Executive Order 11063, as amended by Executive Order 12259; - Executive Orders 11246, 11265, 12138 and 12432; - Section 3 of the Housing and Urban Development Act of 1968 (12 U,S.C. 170), as amended; - Section 504 of the Rehabilitation Act of 1973 (29 U,S.C, 794), as amended; - The Age Discrimination Act of 1975 (42 U.S.C. 6101); - The Fair Housing Amendments Act of 1988. 3. Environmental Review - The National Environmental Policy Act (42 U,S.C, 4321, et seq); - The Council on Environmental Quality Regulations (40 CFR Parts 1500-1508); _ Environmental Review for the CDBG and the Housing Rehabilitation Programs (24 CFR Part 58); - National Historic Preservation Act of 1966. _ National Flood Insurance Act of 1968 as amended by the Flood Disaster Protection Act of 1973. 4. Lead Based Paint _ Lead Based Paint Poisoning Prevention Act (42 U.S.C. 4801, et seq); - HUD Lead Based Paint Regulations (24 CFR Part 35). 5. Asbestos - Asbestos Regulations (40 CFR 61, Subpart M); _ U,S, Department of Labor Occupational Health and Safety (OSHA) Asbestos Regulations (29 CFR 191.1101). 6. Handicaooed Accessibilitv _ Architectural Barriers Act of 1968 (42 U.S.C. 4151 and 24 CFR Part 41). 7. Labor Standards - The Davis-Bacon Act (40 U.S.C, 276a) as amended; _ The Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333); - Federal Labor Standards Provisions (29 CFR Part 5.5). 8, Grant Reaulations _ Community Development Block Grants (24 CFR Part 570); _ Rental Rehabilitation Program (24 CFR Part 511). City of Miami Beach Multi-Family Rehabilitation Program Guidelines 18 " CITY OF MIAMI:BEACH , ' CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139 COMMISSION MEMORANDUM NO. 1 '2. 2.. - qs TO: Mayor Seymour Gelber aad Memben of the City Commission DATE: September 27,1995 SUBJEcr: JOIe Garda-Pedrosa J.( City Maaager , A RESOLUTION OF .. MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA APPROVING AND ADOPTING REVISED GUIDELINES FOR THE MULTI-FAMILY HOUSING REHABILITATION PROGRAMS FROM: Administration Recommendation: It is recommended that the Mayor and City Commission adopt the attached Resolution approving the revised Guidelines for the City of Miami Beach Multi-Family Housing Rehabilitation Programs, Backaround: Since 1982 the City's Multi-Family Housing Rehabilitation Programs, administered by the Housing and Community Development Division (H&CD) of the DDHPS Department, have provided financial assistance to property owners to encourage them to upgrade the existing, rental housing stock in Miami Beach, These funds are provided in one of two ways: an interest subsidy on a bank loan to reduce interest costs from the market interest rate down to a six percent (6%) rate, or altematively, a matching grant of up to one-half the cost of the rehabilitation, This assistance is provided with federal Community Development Block Grant (CDBG) funds received from the U,S, Department of Housing and Urban Development (HUD). To date, more than 40 buildings containing over 1,100 rental units have been, or are currently being renovated. Federal funds in the amount of 6,7 million dollars have been invested, along with 21.1 million dollars in private funds, a leverage ratio of 3,15:1. The previous program excluded any building which was occupied, focusing only on vacant, boarded- up, unsafe buildings, Currently, there are few, if any, vacant buildings left in the City, In the North Beach area, the only available properties eligible for rehabilitation are partly or fully occupied. Clearly, there is a need to modify the programs to permit the rehabilitation of occupied structures, Analvsis: The Housing and Community Development Division, and the City's Loan Review Committee (LRC), with the input of a number of concemed organizations and private citizens, have worked together during the last few months to make the needed revisions to the Guidelines, Additionally, the City Commission established certain parameters goveming the use of COBG funds for this program during the Consolidated Plan Public Hearing on July 26, 1995, The LAC has reviewed in concept the proposed revisions and has recommended their adoption by the City Commission, The most significant of the proposed changes are as follows: AGENDA ITEM C'I-D q'~7-~ DATE COMMISSION MEMORANDUM SEPTEMBER 27,1995 . It will now be possible for the owner of an occupied building to receive rehabilitation assistance and to pay up to one-half of the costs of temporarily moving the tenants out while the rehabilitation is underway. . The maximum amount of subsidy available for a project is increased from $7,500 per residential unit to $10,000 per unit. The term of affordability is three (3) years, with 51% of the units rented to persons eaming 80% or less of the area median income. . Pursuant to the direction of the Mayor and the Commission at the July 26, 1995 meeting, the LRC will be expanded by adding three (3) citizen members appointed by the Mayor and City Commission, with one each representing the South Beach, Mid-Beach, and North Beach sections of the City. In addition, to avoid having an even number of members on the Committee, thus increasing the possibility of tie votes, the members of the LRC recommend adding one additional lender selected in the same fashion as the other lenders on the Committee. The expanded LRC will have nine (9) members. M. Michael Rotbart has been nominated as the North Beach representative, . The Administration is recommending that the term of the Committee members be increased from one (1) year to two (2) years, to enhance the experience of members of the Committee so that continuity can be achieved, Conclusion: Although the existing Multi-Family Housing Rehabilitation Programs have proven successful, there is a need for greater flexibility in the programs in order to encourage new rehabilitation, including occupied buildings. Therefore, the City Administration and the LRC recommend that the Guidelines be revised, in order to, among other things, permit occupied structures to be rehabilitated, to increase the level of citizen participation on the LRC, and to increase the maximum level of subsidy per unit. Therefore it is recommended that the attached Resolution of the Mayor and City Commission approving the revised version of the Guidelines for:the City's Multi-Family Rehabilitation Programs be adopted. JG-P/STP/CAH CAH\\RESO\MFGUIDE.MEM