Resolution 2018-30311RESOLUTION NO. 2018 -30311
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
FINANCE AND CITYWIDE PROJECTS COMMITTEE TO RECAPTURE
$178,378.09 OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
FUNDS, PREVIOUSLY ALLOCATED TO THE MADELEINE APARTMENTS
REHABILITATION PROJECT PURSUANT TO RESOLUTION NO. 2018- 30135,
UNDER THE ACTION PLAN FOR FY 2016 -2017 AND THE FIVE YEAR
CONSOLIDATED PLAN FOR FY 2013 -2017, AND TO REALLOCATE THESE
RECAPTURED CDBG FUNDS TO THE NEPTUNE APARTMENTS PROJECT;
AUTHORIZING THE CITY MANAGER TO SUBMIT THE REVISED ACTION
PLAN AND CONSOLIDATED PLAN TO THE DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT (HUD); AND, FURTHER, AUTHORIZING THE CITY
MANAGER TO EXECUTE ALL NECESSARY DOCUMENTS OR AGREEMENTS.
WHEREAS, the City is an entitlement recipient of HUD formula grant programs as follows:
Community Development Block Grant (CDBG) funds, and HOME Investments Partnership
(HOME) funds; and
WHEREAS, CDBG funds are used to provide vital public services, housing activities and
improvement to public facilities and HOME funds are used for affordable housing activities
including multi- family rentals; and
WHEREAS, the City expects to continue to receive entitlement funds from these grant
programs to operate the City's housing and community development activities; and
WHEREAS, HUD requires entitlement jurisdictions to submit a Five -Year Consolidated Plan,
which establishes the strategic framework upon which the City utilizes its funds; and
WHEREAS, the five -year Consolidated Plan is augmented and refined by the City's annual
submission of the one -year Action Plan which delineates the specific projects and activities
funded by each year's HUD allocation; and
WHEREAS, CDBG and HOME funds must be expended pursuant to the guidelines
delineated in 24 CFR Part 570 and 24 CFR Part 92; and
WHEREAS, the City provided a thirty (30) day public comment period, from March 11, 2018
to April 10, 2018, and a public meeting on March 26, 2018 to advertise the CDBG and HOME
amendments; and
WHEREAS, pursuant to Resolution No. 2018 - 30135, the City recaptured $421,702.31 of
CDBG funds from FY 16/17, allocated to the Lottie Apartments, an reallocated them to the
Madeleine Village Apartments; and
WHEREAS, the Administration recommends recapturing $178,378.09 of these CDBG funds
and reallocating them to the Neptune Apartments project to enable the timely expenditure of
funds and ensure compliance with HUD's timeliness standard; and
WHEREAS, the Neptune Apartments were acquired in 2015 from Miami Beach Community
Development Corporation and the building requires substantial rehabilitation due to neglect,
poor workmanship and inferior building products used by the prior property owner, and
WHEREAS, the scope of the project, with a budget of $2,066,826, includes: termite
treatment; roof replacement; building envelope and facade repairs and restoration; exterior
paint; replacement of air conditioning units; common area floor finishes replacement; renovation
of apartment bathrooms; kitchen cabinets, fixtures and appliances replacement; interior flooring
repairs and insulation; drywall repair and paint; common area painting and landscape; electrical
work; and irrigation and landscaping; and
WHEREAS, the total funds currently committed to the Neptune Apartments is $333,860 (FY
17/18 CDBG funds); and
WHEREAS, by reallocating these CDBG funds from the Madeleine Village project, which
has been deemed overfunded because of recently recalculated project construction limits, the
City can expend these funds to cover additional work required at the Neptune Apartments; and
WHEREAS, these CDBG funds can serve as the required match for the Hazard Mitigation
Grant Program, a Federal Emergency Management Agency (FEMA) grant the City is seeking
for the Neptune Apartments, which could add up to $600,000 in funding to the project and
further reduce the funding gap; and
WHEREAS, this item was originally presented at the April 11, 2018 City Commission and
was subsequently referred to the April 20, 2018 Finance and Citywide Projects Committee
where it was recommended unanimously; and
WHEREAS, as per the Citizen Participation Plan, a change of use triggers a Substantial
Amendment, requiring the Administration to amend the City's various Action Plans and the
2013 -2017 Consolidated Plan; and
WHEREAS, the City Manager is the designated agent for all HUD formula grants and
executes the grant applications, grant agreements, and other applicable HUD documents on
behalf of the City; and
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby
accept the recommendation of the Finance and Citywide Projects Committee to recapture
$178,378.09 of Community Development Block Grant (CDBG) funds, previously allocated to the
Madeleine Apartments rehabilitation project pursuant to Resolution No. 2018 - 30135, under the
Action Plan for FY 2016/2017 and the Five Year Consolidated Plan for FY 2013 -2017, and to
reallocate these recaptured CDBG funds to the Neptune Apartments project; authorize the City
Manager to submit the revised Action Plan and Consolidated Plan to the Department of Housing
and Urban Development (HUD); and further authorize the City Manager to execute all
necessary documents or agreements.
Passed and adopted this 6 day of
ATTEST:
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Rafa I E. ranado, City Clerkya,
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MJAM
BEACH
Resolutions - R7 L
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: May 16, 2018
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
FINANCE AND CITYWIDE PROJECTS COMMITTEE TO RECAPTURE
$178,378.09 OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS,
PREVIOUSLY ALLOCATED TO THE MADELEINE APARTMENTS
REHABILITATION PROJECT PURSUANT TO RESOLUTION NO. 2018 - 30135,
UNDER THE ACTION PLAN FOR FY 2016 -2017 AND THE FIVE YEAR
CONSOLIDATED PLAN FOR FY 2013 -2017, AND TO REALLOCATE THESE
RECAPTURED CDBG FUNDS TO THE NEPTUNE APARTMENTS PROJECT;
AUTHORIZING THE CITY MANAGER TO SUBMIT THE REVISED ACTION PLAN
AND CONSOLIDATED PLAN TO THE DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (HUD); AND, FURTHER, AUTHORIZING THE CITY MANAGER
TO EXECUTE ALL NECESSARY DOCUMENTS OR AGREEMENTS.
RECOMMENDATION
Adopt the resolution.
BACKGROUND
As an entitlement community, the City receives an annual allocation under HUD funding through the
Community Development Block Grant (CDBG) and HOME Investments Partnership (HOME)
programs. HUD requires entitlement jurisdictions to submit a Five -Year Consolidated Plan, which
establishes the strategic framework upon which the City utilizes its funds. The Consolidated Plan is
augmented and refined by the City's annual submission of a One -Year Action Plan, which delineates
the specific projects and activities funded by each year's HUD allocation.
A "Substantial Amendment" to the Five -Year Consolidated Plan or the One -Year Action Plan is
required whenever the City funds new activities, modifies existing activities, or takes other program
administrative actions.
A substantial amendment is:
• subject to the Citizen Participation process (30 -day public comment period);
• requires formal action by the City Commission; and
• requires approval by HUD.
Please note that whenever an award is amended, added or rescinded, both the Action Plan and
Consolidated Plan must be updated. The Consolidated Plan, which dictates the types of activities
that can be funded through the Annual Allocations, can be amended through public notice, a public
Page 1624 of 1842
hearing and compliance with the remaining CDBG expenditure rules (including environmental
clearance, project eligibility, and applicant eligibility). Please note that the Neptune Apartments
project has met all eligibility criteria including environmental clearance which is approved through
HUD and can take several months to obtain.
The City allocated $421,702.31 in FY 16/17 Community Development Block Grant (CDBG) funds
previously allocated to the Lottie Apartments to the Madeleine Village Apartments via resolution No.
2018- 30135. However, subsequent to this action, the scope of work for the Madeleine Village project
was reduced to comply with Building Department guidelines. As such, the City would like to recapture
$178,378.09 and assign these funds to the Neptune Apartments project to cover the funding shortfall
for this project and ensure the timely commitment of these funds to meet expenditure ratio. The City is
obligated to not exceed a 1.5 funds ratio by August 2, 2018. In order to meet this ratio, the City must
expend $477,951 and withdraw these funds from the Treasury by August 2, 2018 to ensure
compliance with the timeliness standard. Please refer to the attached letter received from HUD on
April 9, 2018 as reference.
ANALYSIS
The Neptune Apartments were acquired in 2015 from Miami Beach Community Development
Corporation. The building requires substantial rehabilitation due to neglect, poor workmanship and
inferior building products used by the prior property owner.
The scope of the $2,066,826 project includes:
• termite treatment;
• roof replacement;
• building envelope and facade repairs and restoration;
• exterior paint;
• replacement of air conditioning units;
• common area floor finishes replacement;
• renovation of apartment bathrooms;
• kitchen cabinets, fixtures and appliances replacement;
• interior flooring repairs and insulation;
• drywall repair and paint;
• common area painting and landscape;
• electrical work; and
• irrigation and landscaping.
To date, $82,449 has been spent to address 11 units with shower and water heater replacement as
these were critical. The City has allocated an additional $333,860 which is pending expenditure to
address the larger aspects of this project including termite treatment, common area floors and kitchen
remodeling as many of the cabinets have begun to fail. The pending funding gap for this project is
$1,650,516. The $178,378.09 being requested here would be used to fund the Neptune's termite
treatment, temporary tenant relocation, common area floor replacement, and bathroom and kitchen
rehabilitation.
By reallocating funds from the Madeleine Village project —which has been deemed overfunded
because of project construction limits calculated recently —the City can expend these funds to cover
capital needs at the Neptune Apartments. Accordingly, the following actions are sought:
1. Recapture $178,378.09 of CDBG funds from FY 16/17 previously allocated to the Madeleine
Village Apartments for reallocation to the Neptune Apartments project.
Page 1625 of 1842
2. Authorization for the City Manager to submit the revised Action Plans and Consolidated Plans
noted herein for amendment to ensure HUD compliance.
3. Authorization for the City Manager to execute all necessary documents delineating the actions
taken herein including the allocation of funds.
In addition, these funds can serve as the required match for the Hazard Mitigation Grant Program, a
Federal Emergency Management Agency (FEMA) grant the City is seeking for the Neptune
Apartments, which could add up to $600,000 in funding to the project and further reduce the funding
gap.
Please further note that the City can award these capital funds as delineated in the City's HUD
approved Consolidated Plan. The City's Consolidated Plan states that awards to sub - recipients
must be via one of these four methods:
1. Application with grantee follow -up (Request For Proposal process);
2. Grantee survey of qualified organizations, with direct solicitation thereafter (survey of organizations
followed by Request For Proposal from interested organizations);
3. Response to unsolicited application with adherence to City's Consolidated Plan and HUD rules;
and
4. Review of existing sub- recipients' performance for compliance before renewing their participation
via new funding agreement (ongoing funding of compliant existing provider).
Please note that no organization seeking a capital project would qualify for existing year funds as:
* They are not an existing sub- recipient of CDBG funds;
* They have not submitted an eligible unsolicited funding proposals; and
* Issuance of Requests For Proposals and resulting environmental reviews and HUD approval for
selected projects would not meet the August 2nd deadline.
This item was originally presented at the April 11, 2018 City Commission and was subsequently
referred to the April 20, 2018 Finance and Citywide Projects Committee (FCWPC). Due to the time
sensitive nature of ensuring that the City make funding ratio by August 2, 2018, the item was
presented at the April 20, 2018 FCWPC where it was approved unanimously.
Please note that a separate item regarding a Discussion Regarding The City's Fiscal Year 2018/19
Federal Allocation From The U.S. Department Of Housing And Urban Development (HUD) And
Their Uses was also referred to FCWPC at the April 11, 2018 City Commission. This item was not
time sensitive and is scheduled to be presented on May 18, 2018.
CONCLUSION
The Administration recommends approval and authorization of this item to
1. Enable the timely expenditure of funds to ensure achieving funds ratio.
2. Further address the funding gap for the Neptune Apartments project that impedes the City's ability to provide
safe, decent and sanitary housing to its tenants.
3. Utilize these funds as leverage to secure F EMA funds to close the Neptune Apartments project's funding gap.
KEY INTENDED OUTCOMES SUPPORTED
Ensure Workforce Housing For Key Industry Workers Is Available In Suitable Locations
Amount 1 $148,388.31 Account 1 139- 0530- 000346 -00 -404- 534- 00- 00 -00-
$29,990.69 40010 139- 0530 - 000346 -00- 404 - 534- 00 -00-
00 -40010
Page 1626 of 1842
Total $178,379
Legislative Tracking
Housing and Community Services
ATTACHMENTS:
Description
o
HUD Timeliness Standard letter
�
Public Comment Period Ad
o
Resolution
o County Correspondence re MBCDC
Page 1627 of 1842
occ MGNTp�,f
k: 11111111
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4N DEW,
U.S. Department of Housing and Urban Development
Community Planning and Development Division
Region IV, Miami Field Office
Brickell Plaza Federal Building
909 S.E. First Avenue, Room 500
Miami, FL 33131 -3042
April 9, 2018
Maria Ruiz, Director
Housing & Community Development
City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
Subject: Timeliness Test —
Drawdown ratio FY 2018
City of Miami Beach
Dear Ms, Ruiz:
The purpose of this letter is to advise you that as required by 24 CFR §570.902 of the
Community Development Block Grant (CDBG) regulations; our office reviewed the City of Miami
Beach for compliance with the requirements for carrying out its CDBG program in a timely manner.
A .grantee is considered to be in compliance, if 60 days prior to the end of its program year, there is
no more than 1.50 times its annual grant remaining in the line-of-credit,
The City has an October 1st program year start date. As of April 6, 2018, the City has a
balance in its line -of- credit of 2.08 times its annual grant. Accordingly, the City would be found to
be in non - compliance with the timeliness standard if actions are not taken to spend an additional
S477,951 prior to the test date of August 2, 2018.
The City's program may fall under the sanctions policy enunciated in HUD's letter of
November 20, 2001. This letter, regarding HUD's policy on corrective actions for failure to meet
the timeliness requirements of the CDBG program, was sent previously to the chief elected official
of all entitlement grantees, This policy provides that grantees that become newly untimely,
beginning with those grantees with program years starting February 1, 2002 and later, have 12
months, to their next 60 day test, to reach the 1.5 timeliness standard. Failure to meet the 1.5
standard when the 60 day test is next conducted on August 2, 2018 could result in a reduction of .
your FY 2018 grant by 100% of the amount in excess of 1.5 times the annual grant, except where
HUD determines that the untimeliness resulted from factors beyond the reasonable control of the
grantee. The grant reduction will be. calculated as follows: new 60 day ratio minus 1.50 = x.xx
times FY 2018 grant,
HUD's mission is to create strong, sustainable, inclusive communities and quality; affordable homes for all,
www,bud.uov espanoLhucl.gov
Page 1628 of 1842
Prior to a grant reduction, each grantee is entitled to an informal consultation as provided for
in 24 CFR§ 570.911 of the CDBG regulations. At that time, the grantee will have the opportunity
to demonstrate how factors beyond its reasonable control caused significant delays in program
implementation and affected timely performance. The burden will be on the grantee to make a
compelling argurnent that it qualifies for the exception.
You should take all appropriate actions to improve your drawdown:rate, including,_ but not
limited to, following and updating the City's workout plan, timetables and schedules, and better
oversight and management of subrecipients and operating agencies.
We remind you that the IDIS timeliness reports (IDIS PR56) are a helpful tool for keeping
track of your drawdown progress. IDIS calculates a current drawdown ratio and the exact dollar
amount you will need to draw clown to reach the 1,5 standard.
This office is available to assist you in any way possible. If you have any questions
regarding this correspondence, or any other program matter, please do not hesitate to contact Nora
B. Casal, Senior Community Planning & Development Representative at -(305) 520 -5009, or via
email message at Nora.B,Casal Ohud.gov.
Sincerely,
Ann D. Chavis
Director
Community Planning and Development Division
cc; Lisa Bustamante, Program Manager, US II,U.D
Attachment
Page 1629 of 1842
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Page 1630 of 1842
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March 26, 2018 at 5.00 p.m.
DATE & TIME:
CE: 555 17 Street, Miami Beach, FL 33139, Conference Room.
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COMMENT PERIOD: The thirty (30) day comment period is March 11, 2018 through April 10, 2018.
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CDBG - Repayment and Reallocation Recommendations -
y Name Recapture/ Repayme
Original Acu
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CDBG - Recapture and
Original Activity Name Recapture Amount Proposed Activity
ReiM�%F�i3zr17Jf5�
HOME - Recapture and Reallocation - FY 13/14
Original Activity Name Recapture Amount Proposed Activity
Carrfour Harding Village $1 10 979 00 Madele(ne-Vrflage Arts ie�taon
- �"A�'� �� `z } � "•as7� �5 �, z t �' �' t' "�# " "�� ....`$�"� ` w z t z., a I
CDBG - Recapture and Reallocation - FY 16/17
Original Activity Recapture Amy proposed-Actnry,
i� 1737 Q9
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Lathe Apartments $243,324.22 Madeleine Village Apartments
CDBG - Recapture and Reallocation - FY 16/17
Original. Activity Name Recapture Amount proposed Acty`
1egei�Stces ' ,wr...5fl2fl
Youth Counseling $15,760:93
tl d r $31t 20 O0 Madeleine Vifiage Apaitments;Rellabilitation
Administration $29,572.03
INFORMATION: For further information, contact the City of Miami Beach Office of Housing and Community Services at 305. 673.7260. "Pursuant to Fla. Stat. 286.015, the City hereby
advises the public that if a person decides to appeal any decision made by this Board, Agency or Commission, with respect to any matter considered at its meeting or hearing, he will
need a record of the proceedings, and that for such purpose, affected person may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony
and evidence upon which the appeal is based. This notice does not constitute consent by the City for the introduction or admission or otherwise inadmissible or irrelevant evidence, nor
does it authorize challenges or appeals not otherwise allowed by law"
In accordance with the Americans with Disabilities Act of 1990, persons needing special accommodation to obtain materials in an accessible format to provide comment should contact
the City Clerk's Office at 305 -673 -7411 for assistance; if hearing impaired, call the Florida Relay Service number 800 - 955 -8771 (TDD) or 800 -955 -8770 (voice) for assistance. Para obtener
informacien en espanol, por favor contacte a Cristina Cabrera al 305.673.7260.
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Public Housing and Community Development
7U1NVV1st Court ~10hFloor
Miami, Florida 33138-3914
T 786-469-4100 F 786-469-4199
miamidade.gov
April 27, 2018
Sent Via Certified Mall Ao.:70Yy35000003Y992QO08
Cissy Proctor, Executive Director
Florida Department of Economic Opportunity
107 E Madison St,
Tallahassee, FL 32399
Re: MBCDC: Cresol Park Apartments Inc.
7900-7920 Cresol Boulevard and 1011-1023 79th Street
Miami Beach, FL 33139
Documentary Stamp Surtax loan in the amount of $250,000
Total Units: 16 / 100% Set aside Units
Dear Ms. Proctor:
This letter serves om formal notification that MBCDC: Crespi Park Apartments, Inc. (the "Borrower") ha been
issued the attached Notice of Default by Miami-Dade County (the "County") of the Loan Agreement dated January
28, 2002, between the Borrower and Miami-Dade County (the "Loan Agreement"); the Promissory Note dated
January 30, 2018 given by the Borrower to the County (the "Note"); the Mortgage and Security Agreement and
Collateral Assignment of Leases, Rents, and the Contract Rights given by the Borrower to the County on January
28, 2002 (the "Mortgage"); the FY 2000 and FY 2001 Documentary Stamp Surtax (Surtax) Affordable Housing
Contracts between the Borrower and Miami-Dade County, attested on March 1, 2000 and August 2, 2001
(respectively) in the total amount of up to $250,000 (the "Surtax Contract"), executed simultaneously with the
Rental Regulatory Agreement dated January 28, 2002, collectively referred to herein as the "Loan Documents".
At this point, It is apparent that the Borrower will be unable to cure the violatio
The County ha choice but
todeo|aeod�au|t under the nz�VoQe��hthe�hd�indebhadneaoundorthapnzn8ssory ote evidencing the
County Loan immediately due and payable and/or proceed with foreclosure proceedings on the note and an
action tor specific performance on the Rental RegulatoryAgreernent,
Should you have any questions, please contact, Clarence Brown, Division Director, at (786) 469-2258.
/J 7
NhohoLiu
Director
Enclosures
j.41/1
0: Helon M. Albert, Acting Inspector General, USHUD
Jose Laureano, Special Agent, OIG Local Miami Office, USHUD
Ana Chavis, CPO Director, USHUD
Bob Cook, Regional Faith-Based Liaison, USHUD
Maria Ruiz, Director, I-1CD, Citrof Miami Beach
Maurice Kemp, Deputy Mayor
Richard Graham, CFO, PHCD
Clarence R. Brown, Division Director, PHCD
Jacqueline Dana, Manager, PHCD
Page 1634 of 1842
Public Housing and Community Development
701 NW 1st Court • 16th Floor
Miami, Florida 33136-3914
T 786-469-4100 F 786-469-4199
miamidade.gov
April 27, 2018
Sent Via Certified Mail No.: 7011 3500 0003 1992 9581
Beatriz Cuenca-Barbeiro, Executive Director
Miami Beach Community Development Corporation
945 Pennsylvania Avenue, 2nd Floor
Miami Beach, FL 33139
Re: MBCDC: Crespi Park Apartments Inc.
7900-7920 Crespi Boulevard and 1011-1023 79th Street
Miami Beach, FL 33139
Documentary Stamp Surtax loan in the amount of $250,000
Total Units: 16 / 100% Set aside Units
Dear Mrs. Cuenca-Barbeiro:
As a follow up to our meeting held on April 18, 2018, this letter serves as Notice of Default by Miami-Dade
County (the "County") to MBCDC: Crespi Park Apartments, Inc. (the "Borrower") of the Loan Agreement
dated January 28, 2002, between the Borrower and Miami-Dade County (the "Loan Agreement"); the
Promissory Note dated January 30, 2018 given by the Borrower to the County (the "Note"); the Mortgage
and Security Agreement and Collateral Assignment of Leases, Rents, and Contract Rights given by the
Borrower to the County on January 28, 2002 (the "Mortgage"); the FY 2000 and FY 2001 Documentary
Stamp Surtax (Surtax) Affordable Housing Contracts between the Borrower and IVIlami-Dade County,
attested on March 1, 2000 and August 2, 2001 (respectively) in the total amount of up to $250,000 (the
"Surtax Contract"), executed simultaneously with the Rental Regulatory Agreement dated January 28,
2002, collectively referred to herein as the "Loan Documents".
As of April 19, 2018, the Borrower is in default with the Rental Regulatory Agreement (the "RRA") executed
on January 28, 2002 and recorded at O.R, Book 524939, specifically with regard to those Sections cited
below:
PRA Section l(a)„ Page 2 - Leasinctand Occupancy, Eligible Tenants et or below 65%
Source Document: Tenant Income Certifications (TIC) Forms, Lease Agreements, and Audited
Financials
1. Income calculations were tabulated incorrectly at re-certification.
2, Rent amount reported on the TIC did not match amount specified in the lease agreement.
RRA Section 11, Page 3— Rent increase
Source Document: Vacancy Report (Move In & Move Outs)
Failed to obtain prior approval to change rents from at or below 65% area median income (AMI) to
market rate rents. It is important to note, the Borrower failed to seek prior written approval from
PHCD to change rents from at or below 65% AMI to market rate.
2. On July 21, 2017, MBODC issued the attached notice to Tenants advising they "will not be renewing
their lease at the end of the lease term", Additionally, tenants were advised to "move by the end of
the lease term or sooner but no later than the last day of their lease."
Page 1635 of 1842
Beatriz Cuenca- Barbeiro
April 27, 2018
Page 2
3. As a result;
o 8 tenants moved out, of which;
• 7 were eligible tenant households displaced and forced to vacate their unit.
• As of April 12, these 7 units remained vacant leaving the property at 50% occupancy
rate.
• 1 tenant household was over the income limit;
o 8 eligible tenant households occupying units were asked to vacate.
RRA Section Vll, Page 5 - Financial Reports - Maintenance Reserve for Replacements
Source Document: Audited Annual Operating Financial Statement
1. Failed to deposit the required amount, per unit, per year on a consistent basis.
a) Required deposit of $200 per unit x 16 units = $3,200 monthly.
b) Required total deposit of $38,400 annually.
2. Unauthorized and ineligible use of maintenance reserve for replacement funds. Specifically, funds
were withdrawn from the reserve accounts without written authorization and were not withdrawn for the
purpose of replacement of structural elements and /or mechanical equipment.
3. Unable to determine Current Balance for the account.
As a result, the Borrower is in default of the Rental Regulatory Agreement (RRA). Such violations to the
RRA have resulted in egregious actions by the Borrower where it is impossible for the violations to be cured
at Crespi Park Apartments Inc. Therefore, to protect the County's interest, the County has no choice but
to declare a default under the mortgage with the whole indebtedness under the Promissory Note evidencing
the County Loan immediately due and payable and /or proceed with foreclosure proceedings on the note
and an action for specific performance on the Rental Regulatory Agreement.
The Borrower has thirty (30) days to cure the Event of Default listed above. If the Borrower fails to cure the
Default conditions within the thirty (30) day period, the Lender shall foreclose upon the mortgage, and
otherwise enforce and protect its interest for the Note, and seek any and all remedies to the Lender at law
or equity.
Should you have any questions, please contact, Clarence Brown, Division Director, at (786) 469 -2258,
Sincerel,y,
Mich -el Liu
Director
Enclosures
c: Maurice Kemp, Deputy Mayor
Shannon D. Summerset- Williams, CAO
Richard Graham, CFO, PHCD
Clarence D. Brown, Division Director, PHCD
Jacqueline Dana, Manager, PHCD
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