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Home My WebLink AboutHA28381 Propty Agmnt bw HA & RPM Company PALM DESERT HOUSING AUTHORITY STAFF REPORT REQUEST: APPROVAL OF THE FIRST AMENDMENT TO THE AGREEMENT FOR PROPERTY MANAGEMENT SERVICES BETWEEN THE PALM DESERT HOUSING AUTHORITYAND RAY, DOUGLAS,ANN AND PATRICK, INC., A.K.A. RPM COMPANY SUBMITTED BY: Janet M. Moore, Director of Housing DATE: September 23, 2010 CONTENTS: First Amendment to the Agreement for Property Management Services Letter dated August 5, 2010 from RPM Company contract No. xA28381 Recommendation By Minute Motion that the Housing Authority: 1) Approve the First Amendment("Amendment")to the Agreementfor Property Management Services ("Agreement")with Ray, Douglas, Ann, and Patrick, Inc., a.k.a. RPM Company, effective October 1, 2010, at no increase in management fees; 2) Authorize the Executive Director to finalize the Amendment. Commission Recommendation The Housing Commission will review the recommendation at the regularly scheduled meeting of September 8, 2010. Staff will provide a verbal report upon request at the Authority Board. Executive Summary Authority approval will authorize an extension to the Agreement with RPM Company for an additional 24 months, beginning January 1, 2011�with no increase to the current per door management fee of $35.00 per month. RPM provides the day-to-day management and operation of the properties, including but not limited to, record keeping, leasing, overall maintenance and repairs. Pursuant to Section 28-b of the Agreement the parties shall initiate negotiations at least ninety(90) days prior to the termination for a new agreement for Property Management Services. The existing agreement terminates on December 31, 2010. Discussion The properry manager is responsible for day-to-day management of the properties identified in the agreement. The property operations are subject to visual inspections, annual audits, property performance analysis and tenant surveys. The Housing Commission and members of the Authority Board toured the Authority properties on March 18, 2010Jto see the current condition and result of recent renovations. Staff Report RPM Management Agreement September 23, 2010 Page 2 of 2 The Housing Authority properties continue to be well maintained and operate within budget. The renovations that were recently completed will assist staff as well as RPM to reduce operating deficits for those properties as well as extend the property's sustainability. The management fee will not increase for the extended contract period. The fee will remain at $35.00 per door per month. Based on the current property portfolio the annual fee for services is approximately $430,000. This amount will fluctuate based on downed units, vacancy and rehabilitations. The Authority's management requirements are unique in that they include the Authority's rent structures, certification and compliance requirements as to the Stipulation. As the Agency has acquired additional properties RPM has assumed the management company role and assisted the Authority in the initial cleanup, immediate repairs and stabilization of the new units. This Agreement will extend their contract for an additional 2 year period which is in compliance with existing tax laws applicable to the bond issues used to purchase the properties. RPM's management staff is local and provides tenants face-to-face interaction during income qualification and recertification. Staff believes that this provides a more stable population because the tenants are familiar with the managers and vice-versa. The consistency of management at the properties also provides a sense of reliability to both the tenants and the Authority. Staff recommends approval of the Amendment to the Agreement for Property Management Services by and between the Palm Desert Housing Authority and Ray, Douglas,Ann,and Patrick, Inc.,a.k.a. RPM Company, effective October 1, 2010. Fiscal Analvsis The fiscal impact of the extension is the same as the current impact as the management fee is not increasing with this extension. Submitted by: , Department Head: � - °��' �'��.�--�-�� J n�1Vl. Moore, Director of Housing sti McCarthy, AC e elopment App � 3 �� v. ,� �_:�,� �—V ��,;;�?;�' �,�.�,�:�� : a .� � �,�.� .�'� o� �._.��U 1 U_ .._...�_ . Gi n, Director of Finance , � ; _ ._ � .i _ :.� _.. �. � _m �--A , � .. n '�.: ^'�;,��. , �.�: . ��^i _�:i°•',- J . Wohlmuth, Executive Director , J M;pl G:\rda\Patty LeonWMM�,staff reportlRPM Agreement 2011-2012.doc Cantract No. HA28381 FIRST AMENDMENT TO AGREEMENT FOR PROPERTY MANAGEMENT SERVICES THfS FIRST AMENDMENT ("Amendment") to the AGREEMENT FOR PROPERTY MANAGEMENT SERVICES (the "Agreement") is made as of, October 1, 2010, ("Effective Date") by and between the REDEVELOPMENT AGENCY OF THE CITY OF PALM DESERT, a public body, corporate and politic having a principal place of business at 73-510 Fred Waring Drive, Palm Desert, California, (the "Agency") and RAY, DOUGLAS, ANN & PATRICK, INC., a California corporation, dba RPM Company Apartment Management Services, having a principal place of business at 1420 S. Mills, Suite M, Lodi, California 95242 (the "Manager"). The Agency and the Manager may be referred to herein individually as a "Party" and collectively as the "Parties." RECITALS A. The Agency is a public body, corporate and politic. B. The Manager is engaged in the business of managing, maintaining, repairing, operating and leasing apartment buildings, and has represented to the Agency that the Manager is experienced and competent in said business. C. The Agency and Manager desire to enter into this Amendment to the Agreement. D. The Parties entered into that certain Agreement for Property Management Services by and between Palm Desert Housing Authority and RPM Company dated January 1, 2009 ("Agreement"). NOW, THEREFORE, the Parties agree to amend the Agreement as follows: 1. Term. The parties agree that the term ("Term") of the Agreement shall be extended, beginning January 1, 2011 for an additional twenty four(24) month term, and ending December 31, 2012 or upon written notice by either party in accordance with the provisions of Section 28 in the Agreement. (Amends Section 6 of the Agreement as of the Effective Date). All other terms of the Agreement to remain unchanged and in full force and effect. IN WITNESS THEREOF, the Parties have executed this First Amendment on the date first above written. Manager: Agency: RAY, DOUGLAS, ANN & PATRICK, INC., PALM DESERT REDEVELOPMENT AGENCY, a California corporation, dba a public body, corporate and politic RPM Company Apartment Management Services By: BY� Title: Title: Executive Director gy. ATTEST: Title: Rachelle D. Klassen, Secretary r�'�rda\H(lIiC1N(:\RFNTAT�RPM�MANAC:FMFNT Cf1NTRA('T\9009-9010\Ammdmmt�Momr Aarremrnt Amrndmrni IO-OI-10 dnr r COMF'ANY apartrnent manageme.nt services August 5,2010 Ms.Janet Moare--Director of Housing Palm Desert Housing Authority 73-510 Fred Waring Drive Palm Desert,California 92260-2578 Via:U.S. Mail&E-mail RE: Property Management Contract HA28380—Renewal Dear Ms.Moore: I am writing you today regarding the Property Management contract HA28380; which term is ending December 31, 2010. As listed in Section 28 (b), at least 90 days prior to the contract term ending date, the parties shall initiate negotiations for a new agreement. RPM Company herein offers to extend the contract for an additional term of 24 months under the current terms of the existing contract. Under the current economic environment,we understand that with this offer we partner with the Housing Authority of the City of Palm Desert to maintain the costs of managing the 14 affordable housing communities. We appreciate your consideration of this offer. Please do not hesitate to contact me with your questions. Respectruliy, � �x� � �� :� � �� A ��` ��: � ,� Donnie R. Garibaldi President/CEO ` �� ''�� .��t`� ��::� ��...�� Cc: Marilyn M.Mack—Controller Teresa Vakil'r—Regional Vice President L I V E T H E D I F F E R E N C E HEADQUARTERS 1420 south mills ave., suite m • lodi, california 95242 209-333-3400 • fax 2os-:�:�:�-�aan