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MBCDC SHIP Agreementa~°~- ~ 7L' ~/ SHIP AGREEMENT SHIP Fiscal Year (FY) 2,,0.~07-2008~~and FY 2008-2009 THIS AGREEMENT, entered into this 2.~ day of !"~~e~r4Al~ , 2009, by and between the CITY OF MIAMI BEACH, a Florida municipal corporation, having its principal office at 1700 Convention Center Drive, Miami Beach, Florida, (hereinafter referred to as the City), and the MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION, anot-for-profit Florida corporation, with its principal office located at 945 Pennsylvania Avenue, Miami Beach, Florida (hereinafter referred to as MBCDC). WITNESSETH: WHEREAS, the City has determined the necessity for providing affordable housing in Miami Beach through its Consolidated Plan, which was adopted by Resolution No. 2008-26847, on July 16, 2008; and WHEREAS, the City has been designated by the Florida Housing Finance Administration as an eligible municipality for the receipt of funds as provided under the State Housing Initiatives Partnership (SHIP) Program, pursuant to Chapter 67-37 of the Florida Administrative Code (F.A.C.); and WHEREAS, the City utilizes SHIP funds, provided by the Florida Housing Finance Corporation under the terms of the SHIP Program, in order to expand the supply of decent, safe, sanitary and affordable housing within the City, for income-eligible persons, by making available funds to rehabilitate dwelling units for homeownership or for rent; and WHEREAS, MBCDC has operated a "Scattered-Site" Home-Ownership Program since 1990, assisting low- and moderate-income individuals and families in the purchase of condominiums at various locations throughout Miami Beach, by providing down payment assistance and other forms of aid to the prospective home buyers; and WHEREAS, MBCDC recently acquired two buildings, the Villa Maria, located at 2800 Collins Avenue, and Meridian Place, located at 530 Meridian Avenue, with the intention of rehabilitating them for affordable rental housing. NOW, THEREFORE, in consideration ofthe mutual promises contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS Terms shall be as defined in the State Housing Incentives Partnership (SHIP) Program, 67-37 F.A.C., and any amendments thereto (also referred as the SHIP Program Rule). Any term defined in the SHIP Program Rule, not otherwise defined in this Agreement, shall have the meaning set forth in said Rule. ARTICLE II BUDGET AND SCOPE OF SERVICES MBCDC will utilize $1,009,633 of SHIP Fiscal Year (FY) 2007-08 and FY 2008-09 funds, as set forth in the Scope of Services in Exhibit "A", attached hereto and made a part hereof (hereinafter referred to as the Funds, which definition shall also include the allocation of any additional funds that may be provided by the City in the future as a result of an amendment or modification of this Agreement). The funds shall be used exclusively for rehabilitation, down payment assistance, closing costs assistance and home ownership counseling for MBCDC's Scattered-Site Home Ownership Program and Rental Development. Residential units which are purchased, rented, or rehabilitated using SHIP funds will hereinafter be referred to individually as a "project" or a "SHIP unit" or collectively, as "projects" or "SHIP units." ARTICLE III PROGRAM INCOME MBCDC agrees that any SHIP Program Income generated from the use of the Funds under this Agreement shall be returned to the City to be used to further other affordable housing activities. ARTICLE IV SPECIAL PROVISIONS APPLICABLE TO FUNDS PROVIDED UNDER THE SHIP AND HOME PROGRAMS The parties hereto acknowledge that the Funds provided hereunder are also to be used in conjunction with funds received through the Home Investment Partnerships (HOME) Program. Therefore, some or all ofthe projects assisted will be required to comply with the rules of both the SHIP and HOME Programs. The State of Florida has acted to encourage the use of SHIP Program funds in coordination with HOME Program funds by suggesting that in projects which use funding from both sources, generally the HOME rules will take precedence. However, where both SHIP and HOME Program reference a particular term or rule, the rule which is more restrictive will apply. Any violation of these requirements may, at the City's option, result in the full amount of the Funds being immediately due and payable by MBCDC to the City, and shall also be considered and treated as an event of default, which may result in the City's termination for cause of the Agreement, pursuant to Article XXN herein. MBCDC expressly agrees to the following terms and conditions: (a) Affordabili , Period. The period of time SHIP assisted units must remain affordable is in accordance with the SHIP Program Rule, or the term of a Department of Housing and Urban Development (HUD) insured mortgage, whichever period occurs later. The Funds shall be repaid in their entirety to the City (in accordance with the provisions of the HOME Program regulations 24 CFR Part 92.254) in the event the housing is transferred or sold for any purpose other than settling the estate of one of the owners. (b) Repayment of Funds; Transfer of Title. The Funds shall be repaid in their entirety to the City if the SHIP units are transferred or sold to another owner except as specified herein. Concurrent with the closing on a SHIP unit, the owner shall execute a Restrictive Covenant incorporating the pertinent terms of this Article. (c) Units' Quality Standards. Units funded by Funds must provide safe, sanitary, and decent residential housing for low-income, very low-income, and moderate-income persons (i.e., a person whose income is within specific income levels set forth herein, as documented by HUD). (d) Income Targeting. MBCDC shall ensure and maintain written documentation that conclusively demonstrates that each unit assisted in whole or in part with SHIP Funds provides benefit to very-low (families whose annual incomes that do not exceed fifty percent (50%) of the median family income for the area), and low- income (families whose annual incomes do not exceed eighty percent (80%) ofthe median income for the area), and moderate income (families whose annual incomes which do not exceed one hundred twenty percent (120%) of the area median income), as determined and published from time-to-time by HUD. (e) Records: MBCDC agrees to maintain all records sufficient to meet the requirements of the SHIP Program Rule, including, but not limited to: SHIP Program records, project records, and SHIP Program administration records. MBCDC warrants and represents that it maintains a financial management system that conforms to the financial accountability standards of Attachment F -Office of Management & Budget (OMB) Circular A-110. All records required herein shall be retained and made accessible for a period of at least five (5) years after closing, and/or after the loan has been satisfied, whichever is later, as provided in the SHIP Program Rule, and Florida Statutes Chapter 119. 2 (f) Property Standards. Housing that is assisted with SHIP funds, at a minimum, must meet the Housing Quality Standards of CFR Section 882.109. In addition, housing that is newly constructed or substantially rehabilitated with SHIP funds must meet all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances. (g) Maximum /Minimum Funds Per Unit. The minimum amount of SHIP funds that can be invested is $1,000 per dwelling unit, and the maximum amount is limited to $40,000 per unit for households, except that for those households earning no more than 80% of the area median income the maximum is $60,000 per unit. (h) Environmental Clearance. For any building assisted hereunder in its entirety, immediately after a site is identified, MBCDC shall obtain the City's written environmental clearance statement and hereby agrees to comply with any and all requirements as may be set forth in the Site Environmental Clearance Statement. (i) Affirmative Marketing. MBCDC acknowledged that it is unlawful to discriminate on the basis ofrace, creed, color, religion, age, sex, sexual orientation, marital status, familial status, national origin or handicap. MBCDC agrees to adopt affirmative marketing procedures and requirements, in writing, for SHIP-assisted housing, as set forth in Chapter 67-37 F.A.C. (j) Affordable Housing: Home Ownership. Housing that is for purchase qualifies as affordable housing only if the housing has an initial purchase price, or appraised value after rehabilitation or repair, that does not exceed ninety percent (90%) of the average purchase price for the Miami-Dade Metropolitan Statistical Area (MSA) of 429 619 for new and existing homes, and subject to change from time-to-time, as determined by the Florida Housing Finance Corporation; is the principal residence of an owner whose family qualifies as very low, low, or moderate-income at the time of purchase; and is subject to resale restrictions or recapture provisions established by the City for the required period of affordability. (k) Equal Opportunity. MBCDC agrees to abide by and be governed by the Equal Opportunity and Fair Housing laws. No person in the United States shall on the grounds ofrace, color, national origin, religion, disability or sex be excluded from participation in, or be denied the benefits of or be subjected to discrimination under any program or activity funded in whole or in part with SHIP Program funds. paint. (1) Housing assisted with SHIP funds shall be subject to testing and abatement activities for lead-based (m) Without limitation, MBCDC also agrees to comply with those statutes, regulations and executive orders, as amended, and as set forth in Exhibit "B", attached hereto and herein incorporated by reference. ARTICLE V ELIGIBLE COSTS MBCDC agrees that eligible costs for units assisted under this Agreement are limited to those eligible costs as outlined in Chapter 67-37.007 of the SHIP Program Rule. It is expressly agreed by the parties that no funds obtained hereunder will be used to acquire, rehabilitate or otherwise assist mobile homes. ARTICLE VI METHOD OF PAYMENT (a) MBCDC shall be paid monthly for eligible costs expended (as set forth under the Scope of Services in Exhibit "A") based on actual costs expended, with supporting documentation provided for expenses that are considered reasonable and necessary and approved by MBCDC's authorized representative. 3 (b) Any payment or disbursement of Funds under this Agreement may be withheld at the City's sole discretion pending the receipt of, and approval by, the City of all reports and documents which MBCDC is required to submit to the City pursuant to the terms of this Agreement (and any amendments thereto). (c) MBCDC agrees to provide evidence of appropriate licenses and insurance, as required by this Agreement, for each location assisted hereunder. Such evidence must be kept on file with the City. No payments or disbursements will be made without evidence of appropriate insurance required by this Agreement. ARTICLE VII SUBCONTRACTS (a) The parties agree that the work or services covered by this Agreement, including but not limited to rehabilitation work or services, may be subcontracted without the prior written approval of the City, but MBCDC must obtain at least three (3) bids for all rehabilitation work or services estimated to be in excess of $500. Copies of all bids received shall be kept in the job file. A copy of all executed contracts must be forwarded to the City within ten (10) days after execution. (b) MBCDC agrees to include a statement in all contracts and subcontracts that it executes, or causes to be executed, which expressly provides that the contractor or subcontractor(s) shall indemnify and hold the City harmless against all claims of any nature arising out of the contractor or subcontractor's performance of work or services under the contract. ARTICLE VIII [INTENTIONALLY DELETED] ARTICLE IX TERM OF AGREEMENT This Agreement shall be deemed effective following approval by the Mayor and City Commission and execution of same by the parties hereto. The City and MBCDC mutually agree that the Funds are reserved for MBCDC for the designated time period as follows: FY 2007-08 and FY 2008-09 funds, in the amounts of $536,462.76 and $473,171.20, respectively, must be spent by MBCDC by June 30, 2010 and June 30, 2011, respectively. If MBCDC is not incompliance with the schedules attached hereto in Exhibits A & A-1 hereto, the City, in its sole discretion, shall have the right, upon written notice to MBCDC, without further notice (other than the preceding) required, to automatically terminate this Agreement; declare same null and void with regard to the remaining uncommitted Funds; require, at the City's option, that MBCDC immediately pay the entire amount ofthe Funds back to the City; and take any and all other actions it deems necessary to carry out the commitments of the SHIP Program, including selecting another service provider for all or part of the unspent Funds. ARTICLE X INNTENTIONALLY DELETEDI 4 ARTICLE XI AMENDMENTS Any amendments, alterations, variations, modifications or waivers of any provisions to this Agreement, including an increased allocation of Funds, will only be valid when they have been reduced to writing and duly signed the both parties hereto. Any changes which do not substantially change the Scope of Services or increase the total amount payable under this Agreement, shall be valid only when reduced to writing and signed by the City Manager (or his designee) and MBCDC. ARTICLE XII CONFLICTS OF INTEREST (a) In addition to required compliance with all applicable State, Miami-Dade County, and City of Miami Beach laws, rules, codes, and ordinances (as same may be amended from time to time) pertaining to conflicts of interest and code of ethics, MBCDC shall comply with the standards contained within the SHIP Program Rule. (b) Disclosure. MBCDC shall disclose any possible conflicts of interest or apparent improprieties of any party that is covered by the above standards. MBCDC shall make such disclosure in writing to the City immediately upon MBCDC's discovery of such possible conflict. The City will then render an opinion which shall be binding on all parties. (c) Related Parties. MBCDC shall report to the City the name, purpose, and any other relevant information in connection with any related-party transaction. This includes, but is not limited to, dealing with afor-profit subsidiary or affiliate organization, an organization with overlapping board of directors, or an organization for which MBCDC is responsible for appointing members. MBCDC shall report this information to the City prior to forming the relationship or, if already formed, shall report it immediately. Any supplemental information shall be reported in the City required Progress Report (as referenced in Article XN). ARTICLE XIII INDEMNIFICATION AND INSURANCE MBCDC shall indemnify and hold harmless the City, its officers, directors, employees, and agents from any and all claims, liabilities, losses, and causes of action which may arise out of an act, omission, negligence or misconduct on the part of MBCDC or any of its officers, directors, employees, agents, servants, contractors, subcontractors, consultants and sub consultants, patrons, guests, clients, and/or invitees. MBCDC shall pay all claims and losses of any nature whatsoever in connection therewith and shall defend all suits in the name ofthe City and/or its officers, directors, employees and agents, when applicable, and shall pay all costs and judgments which may issue thereon. This indemnification shall survive termination and/or expiration of this Agreement. MBCDC shall maintain, during the term of this Agreement, the insurance specified below. (1) General Liability: $1,000,000 combined single limit for bodily injury and property damage, for each occurrence. (2) Contractual Liability: the policy must include coverage to cover the above indemnification. (3) Automobile and vehicle coverage, in the amount of $1,000,000 per occurrence, shall be required when the use of automobiles and other vehicles are involved in any way in the performance ofthe Agreement, including non- owned automobile coverage. (4) Workers' Compensation Coverage as per statutory limits required by the State of Florida. 5 (S) Builders Risk/Comprehensive Fire and Hazard Insurance (multi-family projects only): MBCDC shall deliver to the City the original policy of Builder's Risk and Comprehensive Fire and Hazard Insurance, in completed value form, with extended coverage in the amount of the full insurable value of the specific funded project or projects, upon completion of construction, issued by a company satisfactory to the City. (6) Flood Insurance (multi-family projects only): If the floor grade of the first level of the building is determined to be below the base floodplain elevation required by the Federal Emergency Management Agency (FEMA) of eight (8) feet above National Geodetic Vertical Datum (NGVD), MBCDC shall deliver to the City evidence satisfactory to the City that the premises are covered by flood insurance supplied by the Federal Insurance Administration, to the maximum amount available, all as provided in the Flood Disaster Protection Act of 1973, as amended, together with appropriate endorsement. MBCDC agrees that the City shall have the right to take any action necessary to continue said insurance in full force. MBCDC shall submit to the City ORIGINAL certificates of insurance for the above coverage, with the City of Miami Beach, Florida named as an additional insured. All insurance coverage shall be approved by the City's Risk Manager prior to the release of any Funds under this Agreement. Further, in the event evidence of such insurance is not forwarded to the City's Risk Manager within thirty (30) days after the execution of this Agreement, this Agreement shall automatically terminate and become null and void, without further notice to MBCDC required, and the City shall have no obligation under the terms hereof. In the event of such automatic termination, MBCDC shall immediately return the entire amount of the Funds to the City, and the City's rights and remedies against MBCDC shall be the same as set forth in Article IX. ARTICLE XIV REPORTS (a) Pro reg ss Reports. MBCDC agrees to submit monthly progress reports to the City, describing the status of each proposed project and achievement of the project objectives (as provided in the Scope of Services in Exhibit "A", attached hereto). The progress reports shall be submitted no later than ten (10) days after the end of each month, and shall continue until such time as all Funds are expended on specific projects. (b) It will be the responsibility of MBCDC to notify the City in writing, of any action, law, or event, that will impede or hinder the success of the projects and activities as provided in this Agreement. After such notification MBCDC will take whatever actions the City deems appropriate to ensure the success of the projects. Ifthe required reports described above are not submitted to the City, or are not completed in a manner acceptable to the City, the City may withhold payment of Funds until they are completed and/or revised, or may take such other action as it may deem appropriate including, without limitation, termination of the Agreement for cause. ARTICLE XV AUDIT AND INSPECTIONS At any time during normal business hours and as often as the City and/or the Florida Housing Finance Corporation (FHFC) may deem necessary, in their respective sole discretion, there shall be made available to the City Administration, and/or representatives of the FHFC, to audit, examine and make audits of, all contracts, invoices, materials, payrolls, records of personnel, conditions of employment and other data relating to all matters covered by this Agreement. If during the course of its monitoring, the City determines that any payments made to MBCDC do not constitute an allowable expenditure, the City will have the right to deduct/reduce those amounts from their related invoices. MBCDC must maintain records necessary to document compliance with the provisions ofthis Agreement, for at least five (S) years after the close of the fiscal year in which the Funds reserved hereunder are fully expended and/or after the loan has been satisfied, whichever is later. 6 ARTICLE XVI COMPLIANCE WITH LOCAL, STATE AND FEDERAL REGULATIONS MBCDC agrees to comply with all applicable Federal and State regulations as they may apply to program administration, specifically including, but not limited to, the SHIP and HOME Program Rule(s) Additionally, MBCDC will comply with all State and local laws (i.e. Miami-Dade County and City of Miami Beach) and ordinances hereto applicable,. ARTICLE XVII f INTENTIONALLY DELETEDI ARTICLE XVIII ACCESS TO RECORDS MBCDC agrees to allow access during normal business hours to all financial, SHIP Program, and HOME Program (if applicable) records to authorized Federal, State or City representatives, including but not limited to, the purposes set forth in Article XV herein, and agrees to provide such assistance as may be necessary to facilitate the conduct of a financial or operational audit by any of these representatives when deemed necessary to insure compliance with applicable accounting and financial standards. MBCDC shall allow access during normal business hours to all other records, forms, files, and documents which have been generated in performance of this Agreement, to those personnel as may be designated by the City, and/or State, and/or Federal representatives. ARTICLE XIX SEVERABILITY OF PROVISIONS If any provision of this Agreement is held invalid, the remainder of this Agreement shall not be affected thereby if such remainder would then continue to conform to the terms and requirements of applicable law. ARTICLE XX PROJECT PUBLICITY MBCDC agrees that any news release or other type of publicity pertaining to the project as stated herein must recognize the City as the recipient funded by the Florida Housing Finance Corporation, under the State Housing Initiatives Partnership (SHIP) Program, and administered by the Real Estate, Housing and Community Division of the City of Miami Beach as the entity which provided funds for the particular project. ARTICLE XXI SUCCESSORS AND ASSIGNS MBCDC agrees that this Agreement shall be binding upon the parties herein, their heirs, executors, legal representatives, successors, and assigns. ARTICLE XXII INDEPENDENT CONTRACTOR MBCDC and its employees and agents shall be deemed to be independent contractors and not agents or employees of the City, and shall not attain any rights or benefits under the Civil Service or Pension Ordinances of the City, or any rights generally afforded classified or unclassified employees; further they shall not be deemed entitled to the Florida Workers' Compensation benefits as an employee of the City. 7 ARTICLE XXIII ASSIGNMENT This Agreement may not be assigned or transferred by MBCDC without the prior written consent of the City. Transfer requiring the City's prior written consent shall include, without limitation, transfers of an interest of more than five (5%) percent ownership in MBCDC's stock by pledge, sale, or otherwise; if MBCDC makes an assignment for the benefit of its creditors, uses this Agreement as security or collateral for any loan; and/or if MBCDC is involved in any bulk transfer of its business or assets. A merger, dissolution, consolidation, conversion, liquidation or appointment of a receiver for MBCDC, shall also be deemed an assignment ofthis Agreement, and will require the prior written consent of the City thereto. The City may terminate this Agreement for cause in the event that MBCDC does not strictly comply with the procedures established herein for obtaining City consent to assignment or transfer as defined by this Article. ARTICLE XXIV TERMINATION FOR CAUSE AND/OR FOR CONVENIENCE In addition to the City's rights and remedies in Article IX hereof, or as may be provided elsewhere in the Agreement, this Agreement may also be terminated by the City, in whole or in part, for cause, or convenience, in accordance with the provisions of the SHIP Program Rule. The City may place MBCDC in default of this Agreement and may suspend or terminate this Agreement, in whole or in part, for cause. "Cause" shall include the following: (a) Failure to comply and/or perform in accordance with any ofthe terms and conditions ofthis Agreement, or any Federal, State or local regulation; (b) Failure to submit any required report to the City or submitting any required report which is late, incorrect, or incomplete in any material respect; (c) Implementation ofthis Agreement, for any reason, is rendered impossible or infeasible; (d) Failure to respond in writing within thirty (30) days of notice of same from City to any concerns raised by the City, including providing substantiating documentation when requested by the City; (e) Any evidence of fraud, waste or mismanagement as determined, by the City's monitoring of project(s) under this Agreement, or any violation of applicable SHIP and/or HOME Program Rules and regulations, or ofany applicable City, State, County, and/or Federal laws, ordinances, code provisions, ordinance and/or other regulations; (f) MBCDC'S insolvency or bankruptcy; or (g) An assignment or transfer of this Agreement or any interest therein which has not been approved by the City pursuant to Article XXIII. If the default complained of is not fully and satisfactorily cured within thirty (30) days of receipt of such notice of default to MBCDC, at the expiration of said thirty (30) day period (or such additional period of time as may be permitted by the City, in its sole discretion, as required to cure such default in the event MBCDC is diligently pursuing curative efforts), this Agreement may, at the City's sole option and discretion, be deemed automatically canceled and terminated, and the Funds shall immediately become due and payable to the City. The City shall further be fully discharged from any and all liabilities, duties and terms arising out of, or accruing by virtue of, this Agreement. In the event of a default for cause, the City may also, at its option, avail itself of any and 8 all remedies pursuant to 24CFR part 85.43, as amended from time to time, including suspension in whole or in part, of any and all MBCDC's other grant award(s); recapture of those funds; and any other remedies that may be available at law or in equity. Notwithstanding the above, this Agreement may also be terminated by the City, in whole or in part, without cause and for the City's convenience, upon the furnishing of thirty (30) days written notice to MBCDC. In the event of termination for convenience by City, any unexpended funds (including, without limitation, any Funds or portions of Funds hereof which have not been approved as eligible by the City) shall immediately become due and payable to the City. MBCDC further acknowledges and agrees that, in the event of a termination for convenience by City, MBCDC shall not have any claim, demand, or cause of action of whatsoever kind or nature against the City, its agents, servants and employees, and that the City shall be fully discharged from any and all liabilities, duties, and/or other terms arising out of, or by virtue of, this Agreement. ARTICLE XXV ADDITIONAL CITY REMEDIES In the event of termination of this Agreement, whether for cause or for convenience, the City shall additionally be entitled to bring any and all legal and/or equitable actions, which it deems to be in its best interest, in Miami-Dade County, Florida, in order to enforce the City's rights and remedies against MBCDC. The City shall be entitled to recover all costs of such actions, including reasonable attorney's fees. ARTICLE XXVI MAINTENANCE AND RETENTION OF RECORDS MBCDC agrees that it will maintain all records required pursuant to Chapter 67-37, F.A.C., in an orderly fashion in a readily accessible, permanent and secure location, and that it will prepare and submit all reports necessary and to assist the City in meeting record keeping and reporting requirements thereunder. (a) Records shall be maintained for a period of five (5) years after the closeout of funds under this Agreement and/or after the loan has been satisfied, whichever is later except as provided herein in paragraphs (b) and (c) below. (b) If any litigation, claim, negotiation, audit or other action has been started before the regular expiration date, the records must be retained until completion of the action and resolution of all issues which arise from it, or until the end of the regular period specified in paragraph (a), whichever is later; (c) Records regarding project requirements that apply for the duration ofthe period of affordability, aswell as the written agreement and inspection and monitoring reports must be retained for five years AFTER the required period of affordability. ARTICLE XXVII LIMITATION OF LIABILITY The City desires to enter into this Agreement only if in so doing the City can place a limit on the City's liability for any cause of action for money damages due to an alleged breach by the City of this Agreement, so that its liability for any such breach never exceeds the sum of the Funds reserved hereunder, less any amount of the Funds actually paid to MBCDC by the City at the time of the alleged breach. MBCDC hereby expresses its willingness to enter into this Agreement with MBCDC's recovery from the City for any damage action for breach of contract to be limited to a maximum amount of the Funds, less any amount, in whole or in part, of the Funds actually paid to MBCDC by the City at the time ofthe alleged breach. Accordingly, and notwithstanding any other term or condition of this Agreement, MBCDC hereby agrees that the City shall not be liable to MBCDC for 9 damages in an amount in excess of the Funds, less any amount, in whole or in part, of the Funds actually paid to MBCDC by the City at the time of the alleged breach, for any action or claim for breach of contract arising out of the performance or non-performance of any obligations imposed upon the City by this Agreement. Nothing contained in this paragraph or elsewhere in this Agreement is in any way intended to be a waiver of the limitation placed upon the City's liability as set forth in Florida Statutes, Section 768.28. ARTICLE XXVIII VENUE This Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida, both substantive and remedial, without regard to principles of conflict of laws. The exclusive venue for any litigation arising out of this Agreement shall be Miami-Dade County, Florida, if in state court, and the U.S. District Court, Southern District of Florida, if in federal court. BY ENTERING INTO THIS AGREEMENT, MBCDC AND THE CITY EXPRESSLY WAIVE ANY RIGHTS EITHER PARTY MAY HAVE T'O A TRIAL BY JURY OF ANY CIVIL LITIGATION RELATED TO, OR ARISING OUT OF, THIS AGREEMENT ARTICLE XXIX NOTICES All notices shall be sent to the parties at the following addresses: City: Anna Parekh, Director Housing and Community Development Division City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 MBCDC: Roberto Datorre, President Miami Beach Community Development Corporation 945 Pennsylvania Ave. Miami Beach, FL 33139 The above parties may change such addresses at any time upon giving the other party written notification. All notices under this Agreement must be in writing and shall be deemed to be served when delivered to the address of the addressee. All notices served by mail shall be registered mail, return-receipt requested. ARTICLE XXX ADDITIONAL CONDITIONS AND COMPENSATION (a) It is expressly understood and agreed by the parties hereto that monies contemplated by this Agreement to be used for the purposes described herein, originated from grants of SHIP Program funds, and must be implemented with all of the applicable rules and regulation of the Florida Housing Finance Corporation. It is expressly understood and agreed that in the event of curtailment or non-production of said SHIP Program funds, that the financial sources necessary to continue to pay MBCDC hereunder will not be available, and that this Agreement will thereby automatically terminate, effective as of the time it is determined by the City that said funds are no longer available. In the event of such determination by City, MBCDC agrees that it will not look to, nor seek to hold the City, nor any of its officials, directors, officers, employees and/or agents, liable for the performance ofthis Agreement, and all parties hereto shall be released from further liability each to the other under the terms ofthis Agreement. 10 (b) Title and paragraph headings are for convenient reference and are not a part of this Agreement. (c) In the event of conflict between the terms of this Agreement and any terms or conditions contained in any attached document, the terms in this Agreement shall have precedence. In the event of conflict between the terms of this Agreement and any terms or conditions contained in the SHIP Program Rule, the terms of the SHIP Program Rule shall have precedence, unless HOME Program Funds are also being used, in which case the provisions of Article IV shall apply. (d) No waiver or breach of any provision of this Agreement shall constitute a waiver of any subsequent breach of the same or any other provision hereof, and no waiver shall be effective unless made in writing. [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] 11 IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be executed by their duly authorized official(s), on the day and year first above written. ATTEST: MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION ~ Secre ary S Print Name ATTEST: W ~ C:~1 City Clerk President ~ob~ ~ ~~~ o Y y Q- Print Name CITY OF MIAMI BEACH Matti Herrera ower, Mayor F:~neig\HSG-CD\MARK\SHIP 2006-2007 (MBCDC)\SH[P Agreement with MBCDC (FY 2006-2007).doc 12 ppppOVED AS TO FORM & LANGUAGE EXHIBIT A Scope of Services Services to be Provided: MBCDC will provide a combination of homeownership activities (rehabilitation services, new construction, down payment assistance and/or closing cost assistance to home buyers) and rental activities (rehabilitation services) to a minimum of thirteen (13) dwelling units, in accordance with the Budget. Additionally, MBCDC must provide fifteen (15) units from construction-related activities (rehabilitation or new construction). In addition, MBCDC will provide home ownership counseling to approximately (60) families (See Exhibit A-1). The units must have received certificate of occupancy and be occupied by income eligible households in accordance with all other SHIP rules and b t~Renditure deadlines below. Foreclosure Requirement: The homeownership units to be purchased under homebuyer assistance activities must be units which have been: i) foreclosed, i.e. in an "REO" status; or, ii) abandoned (vacant, in tax or mortgage foreclosure proceedings, and where the owner has not paid taxes or mortgage payments in the last 90 days). Due Diligence Requirement: For homeowner activities, if assistance is provided for the purchase of any condominium unit, MBCDC must, as a prerequisite to committing funds for the purchase of said condominium, undertake a due diligence review of the fiscal and physical health ofthe condominium association and of the building. Before the City releases SHIP funds for homeownership activities, MBCDC shall provide the City proof that it undertook said due diligence plan and show that the condominium's financial or physical condition is not likely to jeopardize the SHIP-assisted purchaser. It shall be in the City's sole discretion as to whether such condition is satisfactory to invest SHIP funding. To satisfy this requirement, it is recommended that a professional, licensed home inspector who is capable of examining buildings be contracted to review the physical aspects of the condominium. Expenditure Deadline: MBCDC acknowledges and agrees that Funds provided under this Agreement shall be expended, documented and invoiced to the City as follows: Fiscal Years 2007-08, in the amounts of $536,462.76 must be spent by MBCDC by June 30, 2010; and 2008-09 funds in the amount of $473,191.20 by June 30, 2011. [Units must also be occupied by these dates in order for MBCDC to not be in default under this Agreement]. Waiver of Foreclosure Requirement: If in the case MBCDC is unable to meet the requirement of assisting homebuyers purchase foreclosed or abandoned units, it may seek a waiver of the requirement by submitting a written letter to the Division of Real Estate, Housing and Community Development. The decision to waive the requirement will be at the sole discretion of the City Manager. Allowance of a waiver of the foreclosure requirement may include such considerations as the affordability and/or appeal of foreclosed units available in the market during the expenditure period of the SHIP funds or due diligence findings that eligible-priced foreclosed units are in condominiums that are in poor fiscal or physical health. Recapture of Funds: Dwelling units that utilize SHIP funds which are sold to eligible home buyers shall be subject to subsidy recapture provisions which are consistent with those already adopted by the City Local Housing Assistance Plan, as amended September 10, 2008. It is the City's intent to allow the homeowner to realize the equity from their home. The period of time SHIP assisted units must remain affordable is in accordance with the SHIP Program Rule, as applicable, or the term of a HUD insured mortgage, whichever period occurs later. When SHIP funds provided hereunder are combined with HOME funds, the provisions of the HOME Program with regard to the period of affordability will apply. 13 Payment: Payments by the City to MBCDC shall include those eligible costs as follows: Construction Costs: • Actual cost of rehabilitating housing, including: labor and materials necessary to meet the requirements of the South Florida Building Code, the City of Miami Beach Building Codes, and U.S. HUD Section 8 Housing Quality Standards. • Current or incipient code violations - improvements to correct violations or conditions which may develop into hazardous conditions or code violations. • Good and readily maintainable condition -improvements necessary to put the property and facilities in a condition which requires a minimal amount of maintenance, and when appropriate, improvements to conserve energy. • General properly improvements -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. Rehabilitation soft costs: • Architectural -reasonable fees paid for professional services in preparing work write-ups, cost estimates, working drawings and specifications; for supervision, for cost certification; and for other designated tasks. • Permit fees -those fees paid to the City's Building Services Division for permits necessary to undertake the work outlined in the application for funding as a response to the SHIP Notice of Funding Availability of October 10, 2008. Construction supervision costs payable to MBCDC, in an amount equal to 10% of the value of the total rehabilitation costs and .5% of the appraised value of the units purchased with SHIP funds. Down Payment Assistance Closing Costs Assistance Home Ownership Counseling: MBCDC may retain 2% of the total funds. Required Documentation: For each home buyer assisted with the Funds provided hereunder, MBCDC shall require to keep the following documentation: • A copy of the letter of commitment/award to the SHIP recipient. Completed application form, signed and dated, containing income and asset information, and household characteristics, including age of head of household, family size, race, and special needs, if any. The information must be kept in a form acceptable to the City. The combined household annual anticipated gross income of an applicant must be verified and certified using procedures such as those established by U.S. HUD or the Farmers Home Administration. Whichever method is used, annual gross anticipated income must be used and the SHIP income limits cannot be exceeded. • Income verification forms for each adult in the household, dated within 120 days ofthe award date. Award 14 letter to recipients should include the requirement to notify the City's SH]P Coordinator immediately of any change in income, assets, or household size occurring between the award letter and closing. • A signed affidavit of no income change must be completed, if the closing is more than 120 days after the completion of the original income verification. • A copy of an appraisal, certified to the lender, dated within ninety (90) days of the closing date, showing a value at least equal to the selling price. • A copy of the purchase contract. • Letter of commitment or written agreement. • Loan closing statement. • Lien documentation including the required recapture provisions, executed by the purchaser, and recorded in the public records. • A copy of the initial inspection report and work write-up, describing the specific activities to be included in the rehabilitation, and the estimated cost. • Copies of bids or proposals from contractors. • A copy of the executed construction contract for the rehabilitation work [copies of the contractor's license, and proof of insurance should be included. • Copies of initial, interim and final inspection reports. If assistance is to purchase a condominium unit, the inspection report shall also include an inspection of the building itself. • Copies of all construction payment requests. • Copies of all partial and final releases of lien or lien waivers • Proof of final payment. • Copy of the certificate of completion or certificate of occupancy, as appropriate. • Summary reports of all meetings with the home buyer, contractor[s] and MBCDC staff. • All relevant correspondence. • Proof that a restrictive covenant on the subject property has been recorded in the Miami-Dade Records naming the City of Miami Beach as beneficiary. 15 EXHIBIT A-1 MBCDC Budget for SHIP Funds /FY 2006-2007 SHIP Requirements 65% Homeownership Required Set aside 75% Construction Required Set-Aside 30 % Very Low Income minimum requirement Low-Income minimum requirement Minimum Amount $656,261.45 $757,224.75 $302,889.90 $302,889.90* • The maximum amount that may be spent for any unit or household is $60,000 for Very Low and Low Income and $40,000 for those households earning no more than 120% of the area median income. • The total amount spent on the Low-Income minimum can be less than the minimum requirement if the amount below the minimum is spent instead on the Very Low Income group. • No more than a maximum of $333,179 or 35% of the total award may be spent on rental activities. 16 EXHIBIT B OTHER REQUIREMENTS As the City of Miami Beach is providing this funding through State funds, combined with Federal funds, MBCDC agrees to comply with the following statutes, regulations and executive orders, as amended, as they apply. These requirements are incorporated herein by reference. Freedom of Information and Privacy Acts - Freedom of Information Act (5 U.S.C. 552), and the Privacy Act of 1974 (5 U.S.C. 552a) 2. Equal Opportunity - Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and 24 CFR Part 1 - Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601) - 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) - Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) - The Age Discrimination Act of 1975 (42 U.S.C. 6101) - The Fair Housing Amendments Act of 1988 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 Procedures (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 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) 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. Handicapped Accessibility - Architectural Barriers Act of 1968 (42 U.S.C. 4151 and 24 CFR Part 41) 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) ADDITIONALLY, MBCDC AGREES TO COMPLY WITH ALL EXISTING FEDERAL, STATE AND LOCAL LAWS AND ORDINANCES HERETO APPLICABLE, AS AMENDED. F:\neigV-[SG-CD\MARK\SHIP NOFA 2007-08\Agreement with MBCDC (FY 2008 & 2009).doc 17 0~ O C ~ O ~ .~ O ~ N CN_ •C ~Q i~~+ T n O O a~ N u O ~ Q } ~_ N ~ O O O O N O O N N ~ •- ~ O N O N •- ~ ~ ~ LL M M O ~ N Z Q N N ~ o ~ ~ C O co O 0 O o O w o p • ^ o o ~ m ~ N ~ O ~ nj fV V [ ~ ~ E Q o o o O o a o 0o p O co ~o •- ~0 try to ~ n n I~ n Lf1 -- L!1 lf1 fV Iv1 l!1 Lf1 N ['t Vf VT N O ~0 O ~O O~ Op O I~ ~ v ni n op ~ O ~ N ~ d - ~ GJ > ~ vii uMi N Z Q vi vt ~ o ~ ~ C ~ d- O L^f1 C •~ ^ O O t~ n, m ~ p. ._ ... O ~ !n !y ~'1 ~O U ~ ~ V/ ~ ~ N Q O M O M I~ a O M O M V1 I~ '- O~ O O I~ N I~ O of CO •-- ~D ~ ao vi - ~r 0~ fV fV ~ J N '~ ~ ~ M L f1 v f L f1 t i1 L f1 H N N o . v E ~ c ~, O .~ p cL v=i O c ti O'1 O ci v ~ a ti v ~ ~ ~ Q m V LL ~ O Z ,,, N Z L ~! -- -- -- •Q~~vZ N ` ~ O 7 .C C CO a-+ IC) O ~ O C V ~ ~' Q O O v N L O N O a.~ v AZ v ti 3~~~ n . a, ~ .o ti ~ ~ ti v 3 ~ ~ o ~ v ~; v ~~vQ3ti o ~ v a v O ~ ~ v o - o c ' E~ ~~ o u, v ~., C ~ ~ o ~ ~ v ~ ~ O ti ti Ol ` ~ N N ~ p O ~ O O rt7 L ,.., M ~ a v ti v ,~ •~ a ~ ti v~ v v ~~ v v ~-vc3 0~ M M 0~ O O N O Z v C a E u° 0 H 0~ O 0~ O Cf M O frj fV Lfl M of M ~O N ~0 J' N N 0~ 0~ ~ ri O O ui v1 O O ~O I~ N to N H C 0 V u U h v h c O in '~ Q O v ~ ~ a o a. ti ti V a+ ~ C H a t v 3 v E 0 .o c o c ` u w ~ a, Z ~ 00 0p O~ J~ O N f~'1 N N O~ m o~ .~ ~ ~O N 0~ O J ~'1 O N Lf1 M O ~ M N N N v O y~ N Q ~ ~ c h ~ ~ v ~ r v o v ~ v v c rn v, 3 0 Q ~ v ~ ~ E c O O O ~ F- 2 2 LL c c 7 7 O O ~ ~ 0~ O~ O O °m w N N O O N N Q Z z 0 0 ~' O "- o ~ o M ° M v v J J RESOLUTION NUMBER 2009-27021 A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND THE CITY CLERK TO EXECUTE A STATE HOUSING INITIATIVES PARTNERSHIP (SHIP) PROGRAM AGREEMENT, IN A FORM ACCEPTABLE TO THE CITY MANAGER AND CITY ATTORNEY, BETWEEN THE CITY AND MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION, WHICH PROVIDES SHIP PROGRAM FUNDS, IN THE AMOUNT OF $1,009,633, FROM FISCAL YEARS (FY) 2007/08 AND 2008/09, FOR FIRST-TIME HOMEBUYER ACTIVITIES, INCLUDING HOME OWNERSHIP COUNSELING, DOWN-PAYMENT ASSISTANCE, CLOSING COST ASSISTANCE, RELATED REHABILITATION, AND RENTAL HOUSING DEVELOPMENT FOR INCOME ELIGIBLE HOUSEHOLDS, IN ACCORDANCE WITH THE SHIP PROGRAM RULE AND THE CITY'S LOCAL HOUSING ASSISTANCE PLAN. WHEREAS, the State of Florida enacted the William E. Sadowski Affordable Housing Act (the Act) on July 7, 1992, allocating a portion of new and existing documentary stamp taxes on deeds to local governments to stimulate the production of housing through the State Housing Initiatives Partnership (SHIP) Program; and WHEREAS, the Act requires that in order to qualify for funding, local governments develop a Local Housing Assistance Plan outlining how the funds will be used; and WHEREAS, the City issued a Notice of Funding Availability (NOFA) on October 10, 2008, pursuant to the City's approved Local Housing Assistance Plan; and WHEREAS, the only response to the NOFA was from the Miami Beach Community Development Corporation (MBCDC), which was found to be qualified for said funding; and WHEREAS, MBCDC will utilize the SHIP Funding Years 2007/2008 and 2008/09, in the amount of $1,009,633, for homebuyer activities, including down payment and closing cost assistance, home ownership counseling, related rehabilitation, and rental housing development for the Villa Maria Project, located at 2800 Collins Avenue, or alternatively, pending City approval, MBCDC may utilize the rental development funding for the continued rehabilitation of Meridian Place, a 34-unit affordable rental housing development project located at 530 Meridian Avenue; and WHEREAS, at its meeting on November 19, 208; the Loan Review Committee recommended that MBCDC be allocated SHIP Program funds from FY 2007/08 and FY 2008/09; and WHEREAS, the Administration further requests that the Mayor and City Commission approve and authorize the Mayor and City Clerk to execute a State Housing Initiatives Partnership (SHIP) Program Agreement, in such form as approved by the Administration and City Attorney's Office. NOW, THEREFORE, BE 1T RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby approve and authorize the Mayor and City Clerk to execute a State Housing Initiatives Partnership (SHIP) Program Agreement, in a form acceptable to the City Manager and City Attorney, between the City and MBCDC, which provides SHIP Program funds, in the amount of $1,009,633, from FY 2007/08 and 2008/09, for first-time homebuyer activities, including home ownership counseling, down payment assistance, closing cost assistance, related rehabilitation, and rental housing development, for income eligible households, in accordance with the SHIP Program Rule and the City's Local Housing Assistance Plan. Passed and adopted this 25th day of Febraury , 2009. M YOR Matti Herrera Bower ATTEST: ~' ~~~ CITY CLERK Robert Parcher T:V~GENDA~20091February 25Utegular~SHIP FY 2007-08 - RESG.doc APPROVED AS TO FORM 8~ LANGUAGE & FOR ELUTION Z 19 09 -- - ~.' COMMISSION ITEM SUMMARY Condensed Title: R resolution authorizing a SHIP Program Agreement with MBCDC to provide $1,009,633 SHIP FY 2007/08 and FY 2008/09 allocations pursuant to a Notice of Funding Availability to fund eligible affordable housing activities in accordance with the SHIP Pro ram Rule and the Ci 's Liocal Housin Assistance Plan. Ke Intended Outcome Su orted: Increase access to workforce or affordable housing. Supporting Data (Surveys, Environmental Scan, etc.): Based on the 2007 Customer Satisfaction Survey, affordable ousin was a concern for 82% of those surve ed. issue: Shall the City provide $1,009,633 in SHIP Program funds to assist income eligible households with down-payment assistance, closing costs, related rehabilitation, home ownership counseling, and rental housing development for income eligible households in accordance with the SHIP Program requirements? Item Summa /Recommendation: On October 10, 2008, the City issued a SHIP Program Notice of Funding Availability (NOFA) in the amount of $1,009,633, which represents two SHIP funding years' allocations combined. The SHIP FY 2007/2008 allocation in the amount of $536,462 includes program income up to June 30, 2008, and excludes the allowable City administration fees. The FY 2007/2008 funds must be committed by the City on or before the State deadline of June 30, 2009. The SHIP FY 2008/2008 allocation in the amount of $473,171 excludes the City's administration fee and future program income, which is undetermined at this time. Traditionally, program income is approximately $60,000 per year, and the final amount will be added to the allocation. Only one response was received to the NOFA. Miami Beach Community Development Corporation (MBCDC) was responsive in proposing to utilize the SHIP funds as prescribed for first-time homebuyer activities, including down- payment assistance, closing cost assistance, related rehabilitation, housing counseling, and rental housing development for income-eligible households. The City's Loan Review Committee reviewed MBCDC's proposal and unanimously recommended awarding a contract for the use of the SHIP funds to MBCDC. Due to the widespread foreclosure circumstances, the SHIP agreement will call for approximately 65% of the funding to be dedicated to allowable activities as it relates to the purchase of foreclosed and abandoned properties. The other 35% (which is the maximum percentage of rental housing assistance allowable by the State) will be dedicated to continued rental housing development either in the Villa Maria project, or another City-approved affordable housing project. A recent financing gap in the Villa Maria Project arose when the State Legislature withdrew $190 million from the State Housing Trust Fund, resulting in a decrease of $2 million which had previously been committed to Villa Maria from the Florida Housing Finance Corporation. If the $2 million of State funding is ultimately reinstated to the Villa Maria project, or otherwise filled by another source, then M BCDC may, pending City approval, utilize the rental development funding for the continued rehabilitation of Meridian Place, a 34-unit affordable rental housing development project located at 530 Meridian Avenue. Advisory Board Recommendation: On November 19, 2008 the Loan Review Committee recommended that MBCDC be allocated SHIP Program funds from FY 2007/08 and 2008/09. Financial Information: Source of Amount Account Approved Funds: 1 $536,462 (FY 07/08) 152 - 5717 Z $473,171 (FY 08/09) 152 - 5718 G OBPI Total $1,009,633 _..--- Financial Impact Summary: ___ __ City Clerk's Office Anna Parekh Si n-Offs: Department Director Assista Ity anager City Manager AP HF T: ENDA~2009Uanuary 281Regular~SHIP FY 2007-08 - SUMM.d c AtiENQA ITEM ~ `~~ ~ MIAMI 6 EAR H BATE Z~r-o Tracking: m iv',iaPvDBEACH City of Miami Bsach, 1700 Convention Center Qrlva, Miami Beach, Florida 33139, www.mlamibeoehfl,gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager DATE: February 25, 2009 SUBJECT: A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE MAYOR AND THE CITY CLERK TO EXECUTE A STATE HOUSING INITIATIVES PARTNERSHIP (SHIP) PROGRAM AGREEMENT iN A FORM ACCEPTABLE TO THE CITY MANAGER AND CITY ATTORNEY, BETWEEN THE CITY AND MIAMI BEACH COMMUNITY DEVELOPMENT CORPORATION, WHICH PROVIDES SHIP PROGRAM FUNDS, IN THE AMOUNT OF $1,009,633 FROM FISCAL YEARS 2007/08 AND 2008/09, FOR FIRST-TIME HOMEBUYER ACTIVITIES, INCLUDING HOME OWNERSHIP COUNSELING, DOWN-PAYMENT ASSISTANCE, CLOSING COST ASSISTANCE, RELATED REHABILITATION, AND RENTAL HOUSING DEVELOPMENT FOR INCOME ELIGIBLE HOUSEHOLDS, IN ACCORDANCE WITH THE SHIP PROGRAM RULE AND THE CITY'S LOCAL HOUSING ASSISTANCE PLAN ADMINISTRATION RECOMMENDATION Adopt the Resolution, ANALYSIS The State Housing Initiatives Partnership (SHIP) Program, administered through the Florida Housing Finance Corporation, was established by the 1992 William E. Sadowski Affordable Housing Act to stimulate the production of housing statewide. SHIP Program funds are derived from documentary stamp levies on real estate transactions. Annually, the Florida Housing Finance Corporation allocates SHIP Program funds among participating jurisdictions on a formula basis. The City has participated in the SHIP Program since fiscal year 1995/96. As required by the Florida Housing Finance Corporation, on April 14, 2004, the City adopted a new Local Housing Assistance Plan, which serves as the guideline to utilize SHIP Program funds. For FY 2007/08 the City received $529,771 of SHIP Program funds plus $62,809.33 of program income. For FY 2008/09 the City was allocated $525,768. An additional amount is anticipated for program income but has not yet been received. Program income is defined by the State as "the proceeds derived from interest earned on or investment of the local housing distribution and other funds deposited into the local housing assistance trust fund, proceeds from loan repayments, recycled funds, and all other income derived from use of funds deposited in the local housing assistance trust fund." It is estimated to produce approximately $60,000 annually. According to SHIP Program regulations, ten percent (10%) of each fiscal year's allocation may be retained by the City far its administration. Additionally, the City may retain five percent (5%) of program income towards administrative costs. The total amount the City will City Commission Memorandum SHIP Program Funds for FY 2007-2009 February 25, 2009 Page 2 of 3 receive in administration funding will be approximately $56,117 from FY 2007/08, and approximately $55,577 from FY 2008/09. The exact final amounts will depend on the final program income figures for fiscal year 2008/2009. The sub-recipient/sponsor awarded funding is allowed to keep as administrative fees 10% of the costs of rehabilitation projects it undertakes, 1/2 of 1 % of the cost of acquired units, and 2% of the overall contract award for counseling services. The combined available SHIP Program funding of $1,009,633 for fiscal years 2007/08 and 2008!09 was advertised in a Notice of Funding Availability (NOFA) on October 5 and October 9, 2008 in the Miami Herald. The NOFA was also emailed to approximately twenty-five Miami-Dade affordable housing organizations and developers. It was clarified that applicants do not have to have offices in Miami Beach. The NOFA sought an experienced housing provider with a proven track record in administering affordable housing funds. Responses to the NOFA were due on November 14, 2008. A pre-bid conference was held on October 29, 2008. Six different entities were represented at the pre-bid conference. The City received only one proposal, which was from the Miami Beach Community Development Corporation (MBCDC). Of the allowable uses of SHIP Program funds, The City of Miami Beach's current SHIP Local Housing Assistance Plan (CHAP) which covers Fiscal Years 2007 - 2010 limits its strategies to: • Housing rehabilitation for first time home buyers or owner-occupied housing; • New construction; • Closing costs and down payment assistance for first-time homebuyers for purchase of scattered sites; • Rehabilitation of multi-family buildings for condominium conversion; • Rental housing development (defined as rehab of units in vacant multi-unit buildings); Acquisition/Rehabilitation for Workforce Housing (rental). In accordance with the City's Local Housing Assistance Plan, the SHIP Program funds will be used to provide rehabilitation, down payment assistance, closing cost assistance and rental development. Additionally, in light of the prevalent foreclosure problem plaguing the South Florida real estate market, these activities will be also restricted to the purchase and rehabilitation of foreclosed properties (as was required in the NOFA). Specifically, sixty-five (65%) of the SHIP funds will be limited to activities related to foreclosed properties. MBCDC has recently assisted eight (8) families utilizing previously allocated SHIP and CDBG funds to purchase foreclosed homes. The following strategies will be implemented to the fullest extent possible: a. Reserve escrow accounts will be set up at closing to fund potential condo special assessments. b. In addition to customary condominium unit inspections, MBCDC will conduct an inspection of the entire building to assess general conditions and determine repair needs and possible future assessments. c. Amore stringent income qualification process to ensure that approximately 30% of a household's income will be necessary to fund mortgage payments, taxes, insurance, and condo/maintenance dues combined. Flexibility will be City Commission Memorandum SHlP Program Funds for FY 2007-2009 February 25, 2009 Page 3 of 3 provided when new homebuyers can show a history of paying a rent amount on time which exceeded these percentages of income and where the new homeownership costs (mortgage, taxes, etc.) do not exceed their prior rental amount. SHIP funds will serve approximately 18 households with annual earnings at or below three percentiles of area median income: 50%, 80% and 120%. The remaining thirty five (35%), or $353,371, will be dedicated to the continued rental housing development of the Villa Maria project in order to partially close a $2 million financing gap in the Villa Maria rental development budget. The financing gap was created in early 2009 when the State withdrew from the Florida Housing Trust Fund an estimated $190 million to cope with the state's budget shortage. The withdrawal of funds from the Housing Trust Fund eliminated $2 million previously committed to the Villa Maria project by the Florida Housing Finance Corporation's Special Housing Assistance Development Program. MBCDC is actively working with the Florida Housing Finance Coalition to have the funds reinstated. If the $2 million of State funding is ultimately reinstated or otherwise filled by another source, then MBCDC may, pending City approval, utilize the rental development funding for the continued rehabilitation of Meridian Place, a 34-unit affordable rental housing development project located at 530 Meridian Place. This project has received prior City funding, but currently has a funding gap. On November 19, 2008, the Loan Review Committee recommended that MBCDC, the sole respondent to the NOFA, be awarded available SHIP funds for FY 2007/08 and FY 2008/09. CONCLUSION The Administration recommends that the Mayor and City Commission of the City of Miami Beach, Florida, adopt a resolution authorizing the Mayor and City Clerk to execute a State Housing Initiatives Partnership (SHIP) Program Agreement in a form acceptable to the City Manager and City Attorney, between the City and Miami Beach Community Development Corporation (MBCDC), which provides SHIP Program funds, in the amount of $1,009,633 from fiscal years 2007/08 and 2008/09, for first-time homebuyer activities, including home ownership counseling, down-payment assistance, closing cost assistance, related rehabilitation, and rental housing development for income-eligible households, in accordance with the SHIP Program Rule and the City's Local Housing Assistance Plan. T:VIGENDA12009~February Z5~Regular~SHIP FY 2007-08 - MEMO.doc f ~~ 1 ~ t ~~ } ~ .. x City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov HOUSING AND COMMUNITY DEVELOPMENT DIVISION Tel: (305) 673-7260, Fax: (305) 673-7772 INTEROFFICE MEMORANDUM TO: Robert Parcher, City Clerk FROM: Anna Parekh, Director Office of Real Estate, Housing & Community Development RE: $1,009,633 SHIP Agreement with MBCDC for FY 2007/08 and FY 2008/09 DATE: June 8, 2009 Please find enclosed for the Mayor's signature, three copies of a partially executed SHIP Agreement with the Miami Beach Community Development Corporation (MBCDC) for the Fiscal Years (FY) 2007-08 and 2008-09 in the combined amount of $1,009,633. The resolution for this Agreement provides for execution by the Mayor (see item attached). AP/ms We are committed ro providing excellent public service and safety to all who live, work and play in our vibran-, tropical, historic community,