HomeMy WebLinkAboutHA32320 - Property Mgmt Svcs - PDHA Contract No. HA32320
PALM DESERT HOUSING AUTHORITY
STAFF REPORT
REQUEST: APPROVAL OF THE AGREEMENT FOR PROPERTY MANAGEMENT
SERVICES BETWEEN THE PALM DESERT HOUSING AUTHORITY
AND RAY, DOUGLAS, ANN AND PATRICK, INC., A.K.A. RPM
COMPANY
SUBMITTED BY: Janet M. Moore, Director of Housing
DATE: October 25, 2012
CONTENTS: Agreement
Recommendation
By Minute Motion that the Housing Authority:
1) Approve the Agreement for Property Management Services
("Agreement") with Ray, Douglas, Ann, and Patrick, Inc., a.k.a. RPM
Company, effective January 1, 2013 in the amount of $35 per door with
noted exceptions, substantially as to form;
2) Authorize the Executive Director to finalize, and the Chair to execute the
Agreement.
Executive Summary
Authority approval will authorize the Agreement with RPM Company for 24 months, effective
January 1, 2013 in the amount of $35 per door, per month with noted exceptions that include
downed units, units scheduled for renovation or demolition, and/or units which are unrentable
due to inaction by the manager. There is no increase in fees from the previous contract.
RPM provides the day-to-day management and operation of the properties, including but not
limited to, record keeping, leasing, overall maintenance and repairs. 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.
Backqround
The property management contract provides for the day-to-day management and operation of
the properties, including but not limited to, record keeping, leasing, overall maintenance and
repairs. This Agreement is for a period of 24 months ending in December 2014. The property
manager will be responsible for day-to-day management of the properties identified in the
agreement. The property operations are subject to visual inspections, annual audits, and
property performance analysis annually. In January of this year the Housing Commission and
members of the Authority Board toured the Authority properties to see the current conditions.
Contract No. HA32320
Staff Report
RPM Management Agreement
October 25, 2012
Page 2 of 2
The proposed management fee for the new contract period is the same as the current fee which
is $35 per door per month. There are noted exceptions to the fee including units scheduled for
renovation or demolition, downed units and/or units which are unrentable due to the inaction of
the manager. The annual fees are expected to be approximately $435,000. When units are
acquired or removed, the fees will adjust accordingly.
The Authority's management requirements are unique in that they include the Authority's rent
structures, certification and compliance requirements as to the Stipulation. When compared to
similar services for affordable properties in the area, the fee still appears to be in the middle of
the range. RPM's management staff is local and provides full tenant support which appears to
be unusual in affordable property management. The benefit of this support offers 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.
With the elimination of redevelopment staff has been restricted from entering into contracts for
over a year. This has caused several challenges as it relates to the management of the
properties including issuing new long-term tenant leases as well as obtaining new contracts for
services. Several replacements and deferred maintenance items have been delayed due to this
prohibition. Once we have completed our requirements with the State Department of Finance
for the housing funds, staff will work closely with RPM Company to ensure that repairs,
replacements, and overall property maintenance are being adequately addressed, and that
RPM is being responsive to tenant needs and concerns in a timely manner.
Staff recommends approval of 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 January 1, 2013. The Housing Commission reviewed this request on
October 10, 2012 and is forwarding the request for final review and action.
Fiscal Analvsis
There is no impact to the General Fund.
Submitted by: Reviewed:
�
a t M. Moore, Director of Housing aul S. Gibson, Director of Finance
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n M. Wohlmuth, Executive Director
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AGREEMENT FOR PROPERTY MANAGEMENT SERVICES
THIS AGREEMENT FOR PROPERTY MANAGEMENT SERVICES (this
"Agreement") is made and entered into effective this, January 1, 2013, by and between
the PALM DESERT HOUSING AUTHORITY, a public body, corporate and politic having
a principal place of business at 73-510 Fred Waring Drive, Palm Desert, California, (the
"Authority") 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 Authority and the
Manager may be referred to herein individually as a "Party" and collectively as the
"Parties."
RECITALS
A.The Authority is a public body, corporate and politic, designated to be the
operator ("Operator") of those certain real properties described on Exhibit A attached
hereto and incorporated herein by this reference (the "Properties").
B.The Manager is engaged in the business of managing, maintaining, repairing,
operating and leasing apartment buildings, and has represented to the Authority that the
Manager is experienced and competent in said business.
C.The Authority and Manager desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual and dependant covenants contained in this Agreement, the Parties agree as
follows:
1. Effective Date. The effective date of this Agreement (the "Effective Date")
shall be January 1, 2013.
2. Appointment. The Authority hereby appoints the Manager and the
Manager accepts appointment as the manager of the Properties on the terms and
conditions set forth in this Agreement. The Parties acknowledge and agree that this
Agreement is only a Management Agreement befinreen the Parties, that the Parties are
not joint venturers or partners, and that Manager shall not be deemed to be an
employee of the Authority. The Manager shall at all times be an independent
contractor.
3. Professional Management Standards and the Administrative Plan.
(a) Manager agrees to exert its best efforts, to furnish the services of
its organization, and to exercise the highest degree of professional competence in
managing the Properties to provide the Authority with the economic return consistent
with proper management under the guidelines provided by Authority for affordable
housing.
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(b) The Manager shall manage, maintain, repair, operate and lease the
Properties consistent with other multi-unit apartment complexes or similar type
properties in the surrounding vicinity with comparable facilities and amenities.
(c) Notwithstanding the authority granted in this Agreement, Manager
agrees to abide by those standards and instructions that Authority may issue from time
to time in connection with the Administrative Plan (the "Administrative Plan"). In the
event of any inconsistency between this Agreement and the Administrative Plan, this
Agreement shall control. The Administrative Plan adopted by Resolution No. HA-38
includes the statements of policies of the Authority for the purpose of property
operations and any amendments thereto.
(d) The Manager hereby covenants and agrees to use Manager's best
efforts to actively manage, maintain, repair, operate and lease the Properties at their
maximum potential, considering the Authority's guidelines for affordable housing, and
the Administrative Plan. Manager will provide copies of any procedural manuals
created for the purpose of implementing said Administrative Plan.
(e) The Manager shall be responsive to all tenant requests and
concerns in a timely manner and shall make its best efforts to satisfy tenant requests
and concerns at on-site offices. The Manager shall make its best efforts to notify
Authority of tenant requests and concerns which are likely to be expressed by a tenant
directly to the Authority. Manager shall establish policies in order to address tenant
requests and concerns and resolution in the event of a dispute in accordance with the
Administrative Plan.
(f) Each of the Properties having twenty five (25) or more units shall
have a member of Manager's management staff that shall live on-site. All other
Properties having less than twenty five (25) units shall have a caretaker that lives on-
site. All properties will have an emergency contact available seven days a week, 24
hours a day.
4. Periodic Requirements
The Manager shall:
(a) Not less than once each week:
(i) A member of the Manager's management staff will walk each
property in its entirety to identify any items of concern that may or may not be visible
from frequently traveled thoroughfare, and prepare a detailed report of findings to be
provided to Authority monthly
(ii) Inspect all mechanical and physical systems located on the
properties and provide a report to Authority of said inspections monthly
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(b) Not less than once during every calendar month:
(i) Analyze the occupancy level of the Properties
(ii) Analyze the financial condition of the Properties including,
without limitation, cash flow, income, expenses, and per unit average cost
(iii) Provide Authority with a report regarding the status of
maintenance and repair projects including those in process, upcoming, completed, and
those that have not been completed or which are recommended and have not yet been
implemented, and which are to be carried over to the next fiscal year
(c) Not less than once annually on or before March 1Sr
(i) Prepare and deliver a comprehensive financial budget plan
(Plan), described in Section 18, including reserve accounts where applicable, for the
Properties to Authority for the upcoming fiscal year operations July 1 to June 30.
(ii) Examine the general condition of the Properties and prepare
a list of needed repairs and maintenance, and deliver that list to Authority along with the
estimated costs for review. Once reviewed by Authority, incorporate estimations into
the Plan. Said list will include all items identified by Manager and be prioritized by the
Manager in order of necessity. (i.e. Critical, Health and Safety, Necessary, Preventative,
etc.)
(d) Manager will notify Authority of work, supplies, services,
maintenance or repairs (emergency or otherwise) that were not included in the current
operating budget but that may be necessary prior to the next operating budget year:
(i) In December of each year, Manager will provide a report of
necessary budget adjustments to be made for work that was pre-approved by the
Authority and estimates of anticipated work that is necessary.
(ii) In the event there are items that have not been included in
the Plan or 4.(d)(i), then as necessary, Manager will provide a report of those items by
priority to the Authority. Authority staff will determine whether said request should be
forwarded as a special item to the Authority Board.
(e) On the basis of the information gathered pursuant to Sections (a)-
(d) of this Section 4, the Manager shall recommend in writing amendments and updates
to the Administrative Plan at least once annually. The proposed amended
Administrative Plan, together with any recommendations of the Manager for achieving
maximum economic return of the Properties in light of the affordable housing
requirements of the Properties, shall be submitted to the Authority. Any amendments to
budget, policies or actions in the Administrative Plan are subject to the prior written
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approval of the Aufihority unless the sole reason for the proposed amendment was due
to changes or inconsistencies with current law. The Manager will continually review the
Administrative Plan for the purpose of keeping the Authority advised of necessary or
desirable changes.
5. Determination of Performance Criteria. The parties have developed
various performance criteria categories which will be used to evaluate the performance
of the Manager. Such performance criteria categories are described on Exhibit G
attached hereto and incorporated herein by reference.
6. Term. The Agreement for Property Management Services currently in
effect terminates on its own terms on December 31, 2012. The parties agree that the
term ("Term") of this Agreement shall be for 24 months, commencing January 1, 2013
and ending December 31, 2014, and in accordance with the provisions of Section 28
below may be extended.
7. On-Site Manaaement Office. The Authority shall provide adequate space
on the Properties for a management office in accordance with Exhibit C attached hereto
and incorporated herein by this reference. The Manager shall prepare and submit a
design and budget for pre-approval to furnish the management offices. The Authority
shall pay all approved expenses related to such office, including, but not limited to,
furnishings, equipment, postage, office supplies, electricity, telephone, answering
service, and security monitoring services, if any. The Authority shall retain ownership of
all of the foregoing purchases.
8. Information on the Properties. The Manager acknowledges that it has
been furnished with any available building plans and specifications as well as
environmental reports, if available, for each of the Properties. Manager also
acknowledges that they have received copies of any available manufacturer's
preventive maintenance schedules, guarantees and warranties pertinent to the fixtures,
mechanical equipment, and appliances used in the operation of the Properties. The
Manager shall maintain files for each of the properties with current plans and
specifications, environmental reports, manufacturer's preventive maintenance
schedules, guarantees and warranties pertinent to any new repairs or fixtures,
mechanical equipment, and appliances used in the operation of the Properties.
9. Familiarity With Equipment. The Manager has become thoroughly familiar
with the character, location, construction, layout, plan and operation of the Properties,
and especially of the electrical, heating, plumbing, air conditioning and ventilation
systems, and all other mechanical equipment, and the Manager shall maintain such
familiarity.
10. Leasinq. The Manager will act as the Authority's exclusive agent in
leasing the dwelling units (the "Units") in the Properties. The following provisions will
apply:
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(a) The Manager shail use all reasonable efforts to keep the Properties
leased by procuring tenants for the Properties and negotiating and executing on behalf
of the Authority all leases for the Units. The Manager is authorized to enter into and
execute initial leases with tenants for a minimum term of six months and a maximum
term of 12 months without the further written approval of the Authority. The Authority
shall provide the Manager with income and rent guidelines for each of the Properties
annually or as frequently as Department of Housing and Community Development
("HCD") issues adjustments to the Riverside County Median Income levels. Such
guidelines shall include a provision for utility allowances, if applicable, as set by the
Riverside County Housing Authority which are in effect at the time the rents are
established. Any lease for a shorter or longer period shall require the prior written
consent of the Authority. The Manager shall also submit to the Authority copies of all
notices terminating any tenant leases and all notices to vacate served on any tenant
prior to the expiration of the lease term or after the expiration of the lease term if
tenancy has converted to month-to-month, together with an explanation for the
applicable notice. Manager shall provide Authority with the equipment detail of each
unit annually for the purpose of determining the proper utility allowances by March 1 St of
each year.
(b) The Manager shall lease all the Units in accordance with the terms
of this Agreement, in compliance with all applicable Federal, state and local laws, in
accordance with the Administrative Plan and any further direction from the Authority.
(c) The Manager will be responsible for screening and selection of
existing and prospective tenants in accordance with affordable housing guidelines and
applicable Federal, State and local laws. The Manager will follow the tenant selection
policy described in the Administrative Plan and will show the Properties to all
prospective tenants who qualify under the Authority's affordable guidelines based on the
waiting list policy and unit availability.
(d) The Manager will prepare and verify eligibility certifications and
recertifications in accordance with the guidelines established by the Authority. Rents
will be adjusted pursuant to the Rent Setting Policy of the Authority adopted by
Resolution HA-32 and any amendments thereto.
(e) The Manager shall not decline to lease any Unit on the Properties
to a prospective tenant on the basis of the tenant's race, color, creed, national origin,
ethnicity, sex, religion, age, physical or mental disability, medical condition, sexual
orientation, or any other classification then protected by law.
(f) Prior to executing any lease with a tenant, the Manager shall obtain
the written consent of the applicant to perform a complete background check, and shall
perform same, including: (1) investigate the financial ability and history of the
prospective tenant to pay rent, (2) perform necessary credit checks, (3) obtain
references from employers and prior landlords, (4) verify the income of tenants as
specified in the Administrative Plan(5) verify all matters that are required to be checked
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by Federal and/or state law, in accordance with the type of affordable funding involved,
and (6) verify those matters that may and should be checked to ensure and promote the
safety and weifare of all tenants of the Properties, Manager's staff and the public. A
non-exclusive list of the required and permissive verifications, consent language and
sampling of reputable online resources are set forth in Exhibit K, as may be modified by
changes in applicable law. Manager shall comply at all times with applicable Federal
and state law in all aspects of the tenant screening and application process.
11. Securitv Deposits. The Manager will collect, deposit, and disburse
security deposits in accordance with the terms of each tenant's lease. The amount of
each security deposit will be as specified in the Administrative Plan or applicable law.
The collection and disbursement of security deposits will also be governed by the then
applicable state and local laws. All tenant security deposits will be placed in one or
more trust accounts separate from alt other accounts and funds of the Manager. and/or
the Authority. The security account or accounts will be established at a bank as
specified by the Authority whose deposits are insured by an agency of the United States
government. The security deposit account or accounts will be carried in the Authority's
name and designated on record as "PDHA Security Deposit Account" and in addition,
the Director of Finance of the City of Palm Desert (the "Director of Finance"), his/her
designees, and up to four designated representatives of the Manager shall be included
as signatories to the security deposit account or accounts. The balance of the security
deposit account or accounts shall not be used to pay general operating expenses
without the written consent of the Authority. Notwithstanding the foregoing, security
deposits received must be documented and accounted for at all times and the Manager
must comply with any applicable state and local laws concerning interest payments on
security deposits. The number and structure of security deposit accounts is set forth in
Exhibit D attached hereto and incorporated herein by this reference.
12. Collection of Rents and Other Receipts. The Manager will collect when
due all rents, charges and other amounts receivable on the Authority's account in
connection with the management, maintenance, repair, operation and leasing of the
Properties. Such receipts (except for tenants' security deposits, which will be handled
as specified in Section 11 above) will be deposited in an account or accounts, separate
from all other accounts and funds, of the Manager, at the bank as specified by the
Authority whose deposits are insured by an agency of the United States Government.
This account or accounts will be carried in the Authority's name and designated on
record as "PDHA General Operating Account" and in addition, the Financial Operations
Manager, the Director of Finance, his/her designees, and up to four designated
representatives of the Manager shall be included as signatories to this account, or
accounts. The number and structure of operating accounts is set forth in Exhibit D
attached hereto and incorporated herein by this reference.
13. Enforcement of Leases. The Manager will ensure full compliance by each
tenant with the terms of that tenant's lease. Voluntary compliance will be emphasized.
Involuntary termination of tenancies shall comply with all applicable laws and
regulations. The Manager is designated as the Authority's agent with the right to enter
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and take possession of the units, in accordance with applicable law, and shall lawfully
terminate any tenancy when, in the Manager's reasonable judgment, sufficient cause
(including, but not limited to, nonpayment of rent) for such termination occurs under the
terms of the tenant's lease. For this purpose, the Manager is authorized to consult with
legal counsel qualified to bring unlawful detainer actions and to execute notices to
vacate and judicial pleadings incident to such actions. The Manager shall keep the
Authority informed of such actions and follow such direction as the Authority may
provide for the conduct of any such action. Attorney's fees and costs incurred in
connection with unlawful detainer actions will be paid out of the General Operating
Account as an expense of the Properties. Notwithstanding the foregoing, the Manager
is at all times ultimately responsible for the enforcement of leases. Payment by the
Authority of legal fees and costs incurred in connection with unlawful detainer actions
does not create an attorney-client relationship between the Authority and Manager's
unlawful detainer legal counsel.
14. Maintenance and Repair. The Manager will maintain the Properties in
good, clean, safe and sanitary condition in accordance with the Administrative Plan and
local codes and in a condition acceptable to the Authority at all times. This will include,
but not be limited to, cleaning, painting, plumbing, grounds care, and such other
maintenance and repair works as may be necessary, subject to any limitations imposed
by the Authority in addition to those contained herein. Manager will ensure all vendors
maintain the required licensing, insurance, permits, and approvals for any work
performed in accordance with this Agreement, as well as all local, State, and Federal
codes and regulations.
Incident thereto, the following provisions will apply:
(a) The Manager will complete preventative maintenance activities in
the most cost effective and efficient manner as possible, while not jeopardizing the
expectations in quality for the Properties.
(b) The Manager will contract in compliance with Section 21 hereof
with qualified independent contractors for the maintenance and repair of roofs, air-
conditioning and heating systems and for extraordinary repairs beyond the capability of
regular maintenance employees.
(c) The Manager will systematically receive and investigate all service
requests from tenants, take such action thereon as may be warranted and will keep
records of the same. Service requests will be addressed within four working days;
provided, however, emergency requests will be received and serviced on a 24 hour
basis. The Manager shall promptly investigate and respond to serious complaints as
appropriate, and shall comply with all applicable Federal and state laws in connection
with same, including but not limited to the requirements of the Fair Employment and
Housing Act and other applicable fair housing laws, and shall promptly report such
complaints and Manager's response thereto to the Authority. The Manager shall advise
tenants to report to law enforcement all complaints involving actual or threatened
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criminal activity. The Manager shall provide the Authority with a monthly summary of all
serious complaints received by the Manager. This summary shall include a brief
description of each complaint and Manager's response thereto.
(d) The Manager is authorized to purchase while complying with the
provisions af Section 21, on behalf of the Authority, all materials, equipment, tools,
appliances, supplies and services necessary for proper maintenance and repair. The
Authority shall retain ownership of all said materials, equipment, tools, appliances and
supplies.
(e) Notwithstanding any of the foregoing provisions, the prior written
approval of the Authority will be required for any maintenance or repair project in which
the overall cost is expected to exceed $10,000 for labor, materials, and/or otherwise in
connection with the maintenance and repair of the Properties. This limitation does not
apply to recurring expenses within the limits of the operating budget or to emergency
repairs involving manifest danger to persons or properties, or that are required to avoid
suspension of any necessary service to the Properties. In the latter event, the Manager
will inform the Authority in writing of the facts as promptly as possible. For purposes
herein, "recurring expenses" shall include utilities, pest control, laundry services, pool
services, courtesy patrol, regulatory permits and vermin extermination.
(f) Manager shall enter into all service contracts (such as pool
maintenance/repair , laundry, vermin extermination and landscape maintenance) in
accordance with Section 21 and maintain all required permits and approvals on
equipment, pools, facilities, etc. for each of the Properties.
(g) The Manager shall not undertake any work of construction or any
work which would modify or change the exterior of any building or grounds.
15. Utilities and Services. The Manager will make arrangements for water,
electricity, gas, sewage and trash disposal, telephone and cable service for the
Properties. The Manager will enter into such contracts as may be necessary to secure
such utilities, acting as Manager for the Authority.
16. Employees.
(a) All personnel of the Manager involved with the management,
maintenance, repair, operation or leasing of the Properties will be employees of the
Manager and will be hired, paid, directed, supervised, and discharged by the Manager.
The Manager will provide sufficient resources (staff and/or services) in order to fulfill its
obligations to the Authority under the terms of this Agreement. All costs associated with
hiring and discharging of such employees will be borne by the Manager. The Manager
warrants that it has established employment policies in accordance with employment
laws and said policies include a drug free work place or similar substance abuse policy,
a zero-tolerance violence in the workplace policy and all other policies mandated by
state and Federal law. The Manager warrants that all of its employees meet all
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qualifications, licensing and code requirements, applicable to completing assigned
tasks. The Manager warrants that training will be provided to employees as may be
required by local, State or Federal Law and will be conducted by an individual or entities
qualified to provide such training. It is understood that, subject to sub Sections (b) and
(c), below, all direct costs associated with employees working "on-site" and specifically
identified on Exhibit F will be borne by the Authority to include their direct salary (but not
bonuses), Social Security taxes, employment taxes, medical insurance, Pension Plan,
Worker's compensation, uniforms, Housing allowance and other benefits (if applicable).
The Authority shall have the right to interview and approve the hiring of any prospective
site managers or regional (non-site specific) staff included in Exhibit "F". Only the cost
of those positions set forth on Exhibit F shall be paid by the Authority. Positions may be
added, deleted or modified from Exhibit F based on property need with approval of the
Manager and the Executive Director. Notwithstanding the foregoing, all personnel of
the Manager are exclusively the employees of Manager, and not of the Authority.
(b) Manager shall have full and exclusive responsibility and liability for
payment of all federal, state and local payroll taxes and for contributions for
unemployment insurance, Soeial Security (FICA) and other benefits imposed or
assessed under any provision of law or by regulation, and which are measured by
salaries, wages, or other remuneration paid or payable by Manager to its employees
engaged in any work in connection with this Agreement or indicated herein, for the
payment of which the Authority will reimburse the Manager, subject to the written
approval of the Finance Director. The Manager shall have full and exclusive
responsibility and liability for the withholding and payment of any income taxes required
to be withheld from the wages or salaries of said employees under any provision of law
or regulation. The Manager agrees to save and hold the Authority harmless from all
claims for penalties, interest, or costs which may be assessed under any law or any
rules or regulations thereunder with respect to its failure or inability to perForm the
aforesaid responsibilities.
(c) Upon ten days demand from the Authority, the Manager shall cause
any employee of the Manager to be removed from the Properties, at the Manager's sole
cost and expense.
(d) Manager shall be solely responsible for the methods and means of
managing its personnel to achieve the desired results. Authority's authority over and
involvement in Manager's employment matters shall be limited consistent with
Manager's status as sole employer of its employees.
17. Disbursements from General Operatinq Account.
(a) From the funds collected and deposited by the Manager in the
General Operating Account pursuant to Section 12 above, the Manager will make or
request the following disbursements promptly when payable:
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(i) The Manager shall request from the Director of Finance of
the Authority reimbursement to the Manager for compensation payable to the
employees specified in "Exhibit F" together with an overhead charge percentage that
will be determined annually by the Manager and approved by the Director of Finance of
the Authority. This percentage will be applied to gross payroll with respect to
employees specified in "Exhibit F", included on "Exhibit F" and submitted once each
year during budget review. Said percentage may be adjusted during the budget year
with written approval of the Authority, and will include the employer's portion of inedical,
dental, life and A, D, and D insurance, workers compensation, taxes and assessments
payable to local, state and federal governments in connection with the employment of
such personnel.
(ii) Notwithstanding the provisions of sub-Section (a)(i), above,
the Manager shall make disbursements of all sums otherwise due and payable by the
Authority as expenses of the Properties authorized to be incurred by the Manager under
the terms of this Agreement, including compensation payable to the Manager, pursuant
to Section 27 below, for its services hereunder.
(iii) All checks between $2,500 and $4,999 shall require at least
two signatures. All checks over $5,000 shall require at least two signatures, one of
which must be the signature of an authorized representative of the Authority.
(iv) All wire transfers will be initiated by the Director of Finance
of the Authority or his designee.
(b) Except for the disbursements mentioned in Section 12 above, funds
will be disbursed or transferred from the General Operating Account only as the
Authority may from time to time direct in writing. Manager reimbursement checks in
excess of $500.00 shall require signatures of both the authorized signatory of Manager
and the Finance Director of the Authority or his/her designee.
(c) In the event the balance in the General Operating Account is at any
time insufficient to pay disbursements due and payable under Section 17(a) above, the
Manager will inform the Authority prior to disbursing funds of that fact and the
Authority's Director of Finance will then remit to the Manager sufficient funds to cover
the delinquency. In no event will the Manager be required to use its own funds to pay
such disbursements that are directly related to the operation of the Properties.
(d) The Authority will pay for or reimburse to RPM only those expenses
that are expressly authorized by this Agreement to be borne by the Authority. Any
expenses incurred by Manager as a result of any legal judgment or administrative ruling
against Manager or its officers, employees or agents, or any monetary settlement in lieu
of same to resolve any dispute, or the costs incurred by Manager in connection
therewith, including attorneys' fees for advice or defense to Manager, shall be the sole
responsibility of the Manager. In the event any Authority monies have been disbursed
for this purpose, the Manager shall immediately reimburse Authority. The Authority
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may, in its sole discretion, elect to pay or reimburse the Manager for all or a portion of
such expenses and/or costs if the Authority deems that to be in the best interests of the
Authority or the community which it serves or to promote the public health, safety and/or
welfare, and only upon written agreement between the Authority and Manager, signed
by each of the parties.
18. Budqets. Manager will prepare and submit annual operating budgets for
the Properties in forms satisfactory to the Director of Finance, which budgets shall
include but not be limited to the following: Current Year Final Budget Adopted; Current
Year Expected Actual; Upcoming Year Budget Request; Detailed Descriptions for any
marginal deviations from Current Year; Detailed Descriptions for any Capital
Expenditures for each Property; including Reserve Accounts where applicable. and
Exhibit F described above. Except as permitted under Section 14(e) above, annual
disbursements for operating expenses will not exceed the amount authorized by the
approved budget without the prior written consent of the Authority. The Manager shall
prepare a recommended operating budget for each fiscal year during the term of this
Agreement, and shall submit to the Authority by March 1 st of each year for the following
fiscal year (July 1 to June 30). Additionally, the Manager shall prepare and submit to
the Authority a budget for each fiscal year thereafter covering the period from July 1
through the next following June 30. Each year of the term the Authority will promptly
inform the Manager of any changes incorporated in the approved budget, and the
Manager will keep the Authority informed of any material anticipated deviation from the
receipts or disbursements stated in the approved budget. Manager may, upon the
written request and after receipt of written approval of the Authority, make
disbursements exceeding the budgeted allowances within the budgeted categories for
the Properties.
19. Records and Reports. In addition to any requirements specified in the
Administrative Plan or other provisions of this Agreement, the Manager will have the
following responsibilities with respect to accounts and reports:
(a) The Manager will establish and maintain, on a modified accrual
basis, a comprehensive system of records, books and accounts in a manner
satisfactory to the Authority. All records, books and accounts will be subject to
examination at reasonable hours by any authorized representative of the Authority.
The Manager shall maintain the books and records in good condition and order and
shall preserve the books and records for such time period as the Authority would be
legally required to preserve and maintain the books and records.
(b) The Manager will be subject to a quarterly review and an annual
audit conducted by a firm of the Authority's choice. The Manager agrees to make
available all applicable records to the Authority's auditors for annual review. The report
will be prepared in accordance with generally accepted auditing standards. The audit
report submitted by the audit firm will also be subject to a single audit at the Authority's
discretion. The preparer's services will be an expense of the Authority Properties.
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(c) The Manager will furnish information as may be requested by the
Authority from time to time with respect to the financial, physical or operational condition
of the Properties, including, without limitation: (i) calculation and billing rent and other
tenant charges; (ii) maintaining accounts receivable and delinquency records; (iii)
maintaining rent rolls; (iv) processing and paying operating and capital invoices; (v)
recording activity and comparing such activity to budgeted amounts; (vi) reconciling all
expenditures; (vii) remitting excess funds to the Authority and requesting needed funds
from the Authority; (viii) processing payroll for personnel employed in the discharge of
this Agreement and in compliance with taxing authorities and other reporting
requirements associated with payroll; and (ix) reports detailed in Exhibit I.
(d) By the 20th day of each month, the Manager will furnish the
Authority with an itemized list of all delinquent accounts, including general operating
accounts, as of the tenth day of the same month.
(e) The Manager shall submit, to the Authority's Finance Director those
reports set forth in Exhibit H on the periodic bases set forth in Exhibit H. Reports
designated as "monthly" on Exhibit H shall be submitted by the 20t" day of each month;
reports designated as "quarterly" shall be submitted by the 20th day of every third
month, and reports designated as "annual" shall be submitted at the end of the fiscal
year or the end of the calendar year as set forth on Exhibit H. In explanation but not
limitation of the foregoing, the monthly reports to be submitted include: a statement of
receipts and disbursements during the previous month; a schedule of accounts
receivable and payable; reconciled bank statements for all accounts maintained by the
Manager on behalf of the Authority reflecting disbursements and deposit amounts as of
the end of the previous month; a copy of general ledger account transactions and
monthly aggregate utility consumption by utility; and such other matters relative to the
management, operation, and maintenance of the Properties including actual income
and expense balances compared to budgeted or expected results as required by the
Finance Director of Authority. Additional reports may be requested throughout the year
as the Authority deems necessary.
(f) On the 20t" day of each month, the Manager will submit to the
Authority the reports listed on Exhibit I attached hereto and incorporated herein by
reference, to assist the Authority in determining compliance with that certain Stipulation
for Entry of Judgment in case number Indio 51124 as consolidated with case numbers
Indio 51143 and 51159 which has been provided to the Manager.
20. Fidelity Bond. The Manager will place the Properties on a master fidelity
bond, which provides blanket coverage equal to two months gross rent potential. The
bond will provide coverage for all principals and agents of the Manager and all persons
who participate directly or indirectly in the management of the Properties and their
assets, accounts and records. The premiums for such a bond will be paid and borne by
the Manager. Specifically, coverage for the Manager, including all applicable persons in
the Manager's employ, will be paid by the Manager, and coverage for the Authority's
personnel, if applicable, will be paid by the Authority. Said fidelity bond shall be issued
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by a company which is reasonably acceptable to the Authority, and Manager shall
deliver to the Authority a copy of said fidelity bond upon execution by the Authority of
this Agreement.
21. Bids, Discaunts, Rebates or Commissions. The Authority and Manager
agree to obtain contract materials, supplies and services at the lowest possible cost and
on the most advantageous terms to the Properties and to secure and credit to the
Properties all discounts, rebates and commissions obtainable with respect to
purchases, service contracts and all other transactions on behalf of the Properties. The
Manager agrees that no goods and services shall be purchased from individuals,
related companies and companies having a financial or pecuniary interest (a "conflict-of-
interest") with the Manager. All vendor accounts shall be opened in the Authority's
name, upon prior written approval of the Authority.
The Manager will develop detailed scopes of work, materials, supplies,
equipment and contractual services for any work or repair the cost of which may exceed
$5,000 for a single Unit or project. The Manager shall comply with the procedures set
forth in Ordinance No. 928 of the City of Palm Desert, and any amendments thereto, in
connection with the purchase of any materials, supplies, equipment and contractual
services to be paid for by the Authority under this Agreement.
The Manager agrees to accept the bid which represents the lowest price, taking
into consideration the bidder's reputation for quality of workmanship or materials and
timely performance, and the time frame within which the services or goods are needed.
The Manager must make every reasonable effort to assure that the Authority is
obtaining services, supplies and purchases at the lowest possible cost. The Manager
must make a written record of any verbal estimate obtained. Copies of all required bids
and documentation of all other written or verbal cost comparisons made by the Manager
shall be made part of the records of the Properties and shall be retained for three years
from the date the work was completed. This documentation shall be subject to
inspection by the Authority or its designee and the Manager agrees to submit such
documentation upon request. Further, Manager shall annually submit a report to the
Authority describing the outcome of all bidding procedures, which report shall include
the names of all bidders and the amount of their bids, and shall indicate to which bidder
the contract was awarded.
The Manager agrees to make available to the Authority, when requested, all
records of the Manager, which relate to the provision of goods or services to the
Authority whenever funds from the Properties have been used to pay for such goods
and/or services (other than management services).
22. Resident Services Proqram. The Manager will be responsible for carrying
out any resident retention or social services program described in the Administrative
Plan and any other program or service that may become available that are in the best
interest of the residents or community to promote public health, public safety or tenant
welfare.
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23. Resident - Manaqement Relations. The Manager wiil establish quarterly
meetings at Properties containing 150 or more units to encourage and promote
communication and tenants initiatives.
24. Defense, Indemnitv and Hold Harmless Aareement. The Manager and
Authority agree that the Authority, the City of Palm Desert, and their respective officials,
officers, employees, and agents (collectively "Indemnitees") should, to the extent
permitted by law, be fully protected against any loss, injury, damage, complaint, claim,
lawsuit, cost, expense, attorneys fees, litigation costs, defense costs, court costs or any
other cost arising out of or in any way related to Manager's perFormance of this
Agreement. Accordingly, the provisions of this defense, indemni#y and hold harmless
provision are intended by the Parties to be interpreted and construed to provide the
fullest protection possible under the law to the Indemnitees. Manager acknowledges
that Authority would not enter into this Agreement in the absence of the commitment of
Manager to indemnify, defend, protect and hold harmless the Authority as set forth
herein.
To the full extent permitted by law, Manager shall indemnify, defend, protect and
hold harmless the Indemnitees from any liability, complaints, claims, suits, actions,
arbitration proceedings, administrative proceedings, regulatory proceedings, losses,
expenses or costs of any kind, whether actual, alleged or threatened, actual attorney
fees incurred by Authority, court costs, interest, defense costs including expert witness
fees and any other costs or expenses of any kind whatsoever without restriction or
limitation incurred in relation to, as a consequence of or arising out of or in any way
attributable actually, allegedly or impliedly, in whole or in part to the perFormance of this
Agreement. All obligations under this provision shall be paid by Manager as they are
incurred by the Authority. Manager shall defend the Indemnitees, and bear the expense
thereof, with lawyers selected or approved by the Authority.
Without affecting the rights of the Indemnitees under any provision of this
Agreement or this Section 24, the Manager shall not be required to indemnify, defend,
protect and hold harmless the Indemnitees as set forth above for liability attributable
solely to the fault of the Indemnitees.
25. Professional Services Insurance Requirements.
(a) Commercial General Liability/Umbrella Insurance. The Manager
shall obtain, at its sole cost Commercial General Liability coverage "occurrence" form
CG 00 01 or its exact equivalent, with minimum limits of$1,000,000 per occurrence and
$2,000,000 in the general aggregate. Insurance is to be placed with insurers with a
current A.M. Best and Company rating level of A- or better, Class VIII or better, licensed
to do business in California, and satisfactory to the Authority. Manager agrees to
endorse third party general liability coverage required herein to include as additional
insureds the City of Palm Desert, the Palm Desert Housing Authority, and their
respective officials, officers, employees, volunteers, and agents (collectively "Additional
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Insureds"). The acceptable additional insured endorsement that must be submitted to
the Authority is CG 20 10 or its exact equivalent, specifying the Additional Insureds as
additional insureds. Coverage shall apply on a non-contributing basis in relation to any
other insurance or self-insurance, primary or excess, available to the Additional
Insureds. Coverage shall not be limited to the vicarious liability or supervisory role of
any of the Additional Insureds. Insurance shall be issued as project specific to this
agreement. Excess or Umbrella Liability Insurance (Over the Primary) if used to meet
limit requirements, shall provide coverage at least as broad as specified for the
underlying coverages. Any such coverage provided under an umbrella liability policy,
shall include a drop down provision providing primary coverage above a maximum
$25,000 self-insured retention for liability not covered by primary, but covered by the
umbrella. Coverage shall be provided on a "pay on behalf° basis, with defense costs
payable in addition to policy limits. There shall be no cross liability exclusion precluding
coverage for claims or suits by one insured against another; policies shall also have
concurrent starting and ending dates. Coverage shall be applicable to the Authority or
City of Palm Desert for injury to employees of The Manager, subcontractors, or other
involved in the scope of this agreement. The scope of coverage provided is subject to
approval by the Risk Manager following receipt of proof insurance as required herein.
(b) Worker's Compensation/Employers' Liabilitv Insurance. The
Manager shall procure and maintain Workers' Compensation insurance complying with
California worker's compensation laws, including statutory limits for workers'
compensation and an Employer's liability limit of $1,000,000 per accident or disease. .
Unless otherwise agreed, this policy shall be endorsed to waive any right of subrogation
as respects the Authority, the City of Palm Desert, and their respective officials, officers,
employees, volunteers, and agents.
(c) Evidence of Insurance. The Manager shall provide evidence of the
insurance required herein, satisfactory to the Authority, consisting of certificate(s) of
insurance evidencing all of the coverages required and an additional insured
endorsement to the Manager's general liability and umbrella liability policies (if any)
using ISO form CG 20 10. In addition, the Manager agrees to provide complete copies
of all polices of insurance to the Authority annually or upon request. The Certificate(s)
shall reflect that the insurer will provide immediate notice of any cancellation or
modification of coverage to the Authority, per the terms of the policy. The Manager
agrees to require its insurer to modify the certificates to delete any exculpatory wording
stating that failure of the insurer to mail written notice of cancellation imposes no
obligation, and to delete the word "endeavor" with regard to any notice provisions. All
insurance coverage and limits provided pursuant to this Agreement shall apply to the full
extent of the policies involved, available or applicable. Nothing contained in this
Agreement or any other agreement relating to the Authority or its operations shall limit
the application of such insurance coverage. The endorsements are to be signed by a
person authorized by that insurer to bind coverage on its behalf and are to be provided
on standard ISO forms noted above. All endorsements are to be received and
approved by the Risk Manager prior to the commencement of work.
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(d) No Limitation on other Insurance. Requirements of specific
coverage features or limits contained in this Section 25 are not intended as a limitation
on coverage, limits or other requirements, or a waiver of any coverage normally
provided by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only and is not intended by any Party to be all inclusive, or to
the exclusion of other coverage, or a waiver of any type.
(e) Subroqation. All general or auto liability insurance coverage
provided pursuant to this Agreement, or any other agreements pertaining to the
performance of this Agreement, shall not prohibit the Manager, its employees, or
agents, from waiving the right of subrogation prior to a loss. The Manager hereby
waives all rights of subrogation against the Authority and the City of Palm Desert.
(f) Authoritv's Riqht to Purchase Replacement Insurance. In the event
any policy of insurance required under this Agreement does not comply with these
requirements or is canceled and not replaced, the Authority has the right but not the
duty to obtain the insurance it deems necessary and any premium paid by the Authority
will be promptly reimbursed by the Manager.
(g) Proof of Insurance. The Manager shall provide proof that policies of
insurance required herein expiring during the term of this Agreement have been
renewed or replaced with other policies providing at least the same coverage. Such
proof will be furnished not more than 72 hours after the expiration of the coverage(s).
Any actual or alleged failure on the part of the Authority or any other of the Additional
Insureds under these requirements to request or obtain proof of insurance required
under this Agreement in no way waives any right or remedy of the Authority or any other
of the Additional Insureds, in this or any other regard.
(h) Subcontractor Proof of Insurance.
(i) Subcontractors Performinq Recurrinq Work or Work in
Excess of $2500. The Manager shall require all subcontractors or other parties which
provide (i) recurring services to the Properties, or (ii) services in excess of $2,500 in a
six month Period (a "Major Subcontractor") to the Properties to provide the same
minimum insurance coverage required of the Manager. Manager agrees to monitor and
review all such coverage and assumes all responsibility for ensuring that such coverage
is provided in conformity with the requirements of this section. The Manager agrees that
upon request, all agreements with Major Subcontractor, or others with whom Manager
contracts with on behalf of the Authority, will be submitted to the Authority for review.
. For purposes of this Section a contractor or party hired for the work shall be deemed to
be performing "recurring work" in the event that contractor or party hired perForms in
excess of a single segregated or discrete project in any six-month period. The Manager
agrees to obtain certificates evidencing such coverage and to make reasonable efforts
to ensure that such coverage is provided as required herein. Failure of the Authority to
request copies of such agreements will not impose any liability on the Authority. The
Manager agrees to require that no contract used by any Major Subcontractor, or
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contracts the Manager enters into on behalf of the Authority, will reserve the right to
charge back to the Authority the cost of insurance required by this Agreement.
(ii) Subcontractors Pertormina Nonrecurrinq Work or Work Less
Than or Equal to $2500. The Manager shall require all subcontractors or other parties
which provide (i) nonrecurring services to the Properties, and (ii) services in an amount
not to exceed $2,500 in a six-month Period (a "Nonrecurring Subcontractor") to provide
Commercial General Liability insurance in the amounts set forth below and Workers
Compensation insurance to conform with the requirements of this section. For
purposes of Section 25, a contractor or party hired for the work shall be deemed to be
providing "nonrecurring work," so long as that contractor or party hired for the work does
not perform more than a single segregated or discrete project in a six-month period. In
the event a Nonrecurring Subcontractor performs more than a single discrete project in
a six-month period or work exceeding $2,500 in value, that Nonrecurring Subcontractor
shall lose its status as a "Nonrecurring Subcontractor" and shall be automatically
deemed a "Major Subcontractor". The liability limits for Nonrecurring Subcontractors or
other parties shatl provide no less than $500,000 per occurrence for all coverages and
$500,000 in the general aggregate. The Manager agrees to verify such coverage and
make reasonable efforts to ensure that such coverage is provided as required herein.
The Manager agrees to require that no contract used by any Nonrecurring
Subcontractor, or contracts the Manager enters into on behalf of the Authority, will
reserve the right to charge back to the Authority the cost of insurance required by this
Agreement. The Manager agrees that upon request, all agreements with Nonrecurring
Subcontractors, or others with whom Manager contracts with on behalf of the Authority,
will be submitted to the Authority for review. Failure of the Authority to request copies
of such agreements will not impose any liability on the Authority nor constitute a waiver
of the rights of the Authority hereunder.
26. Compliance With Governmental Orders. The Manager will take such
action as may be necessary to comply promptly with any and all governmental orders or
other requirements affecting the Properties, whether imposed by federal, state, county
or municipal authority. Notwithstanding the forgoing, the Manager shall take no such
action so long as the Authority is contesting, or has affirmed its intention to contest, any
such order or requirement. The Manager will notify the Authority in writing of all notices
of such orders or other requirements as soon as possible from the time of their receipt.
27. Manaqer's Compensation. The Manager will be compensated for its
services under this Agreement by monthly management fees. Such fees will be
payable on the first day of each month, in arrears, for the services provided in the prior
month for the term of this Agreement. For the purpose of this Section, the term
`occupied units' shall include those units which are currently leased, on notice to vacate,
or temporarily vacant due to a move out. The Management Fee ("Fee") shall be
calculated monthly according to the following schedule:
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(a) In the case of occupied units, each such monthly fee shail be in the
amount of$35.00 per Unit per month except as follows:
(i) For Units where a Notice of Termination of Tenancy
("Notice") was provided by the tenant as required (30 calendar day notice) and a Unit
remains vacant for 30 calendar days or more, Manager will not be entitled to the
monthly fee, except in those circumstances where the vacancy is the result of the
Authority's leasing process for affordable Units.
(ii) For Units where no Notice was given, the tenant chose to
`quiY or the tenant skipped, and a Unit remains vacant for 45 calendar days or more,
Manager will not be entitled to the monthly fee.
(b) In the case of unoccupied units (except those units described in
Section 27(c-e) below), each such monthly fee shall be as follows:
(i) $35.00 per Unit per month for the first four months for Units
that have been determined, in the Authority's sole and absolute discretion, to be
`unrentable' or `down' due to physical condition or damage. Unless otherwise
determined by the Authority, Manager is expected to repair said units within the four
months. If Manager fails to repair units within the given time, no fee will be paid until the
unit is available for occupancy.
(ii) No Fee will be paid for Units that are unrentable or down due
to action or inaction by the Manager.
(iii) $35.00 per Unit per month for those units specifically
indentified in Item No. 14 of Exhibit A and any amendments thereto. These units are
typically owned by the Authority and are considered `for-sale' units. Said units are to
remain unoccupied unless, in the Authority's sole and absolute discretion it determines
otherwise. Manager is expected to maintain said units in the same condition as when
originally assigned as well as visually inspect, coordinate services, complete any minor
repairs, and respond to emergencies. Fees for these units shall be payable monthly in
arrears until the date of the close of escrow wherein the ownership is no longer the
Authority or at such time as the Authority notifies Manager otherwise.
(c) In the case of units that are newly constructed or newly renovated
which will be added to Exhibit A, Fee shall be $10.00 per Unit per month commencing at
such time as the construction/renovation has reached 90% completion as determined
by the Contractor's billing until Certificate of Occupancy, in the case of new units, or
Certificate of Completion, in the case of renovated units, is issued.
(d) In the case of units which were `downed', as described in Section
27(b)(i) and direction has been given to the Manager by the Authority not to repair said
units, commencing with the fifth month, the Fee shall be reduced to $20.00 per Unit per
month until Manager is no longer responsible for said units.
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(e) Except as otherwise expressly provided in this Agreement, all
employees not identified in Exhibit F and other overhead expenses of the Manager
(including but not limited to, costs of office supplies and equipment, postage,
transportation, travel expenses for managerial personnel and telephone services) will be
borne by the Manager. All services for management, accounting, and reporting, with
exception of the Authority's requested annual audit, shall be borne by the Manager.
In addition to the Management Fee, the site employees for the Properties
shall be paid based on the Employee Salaries listed on Exhibit F attached hereto and
incorporated herein by this reference.
28. Termination.
(a) Termination For Cause: Either party may terminate this Agreement
with cause by giving written notice to the other party not less than 90 days prior to the
date of termination. Any such written notice for cause shall specify the default. If the
default specified has not been cured within 21 days of receipt of the notice, this
Agreement shall terminate on the date of termination set forth in the notice. Upon
termination, Manager shall be compensated only for those services that have been
satisfactorily rendered to Authority, and Authority shall be entitled to no further
compensation.
(b) Termination at End of Term/Extension: At least ninety (90) days prior
to the automatic termination of this Agreement (the "Negotiation Period"), and unless
either party has given timely notice under Sections 28-(a) above prior thereto, the
parties shall initiate negotiations for a new agreement for Property Management
Services and use best efforts and engage in good faith negotiations to finalize such
agreement and obtain final approval thereof prior to the automatic termination of this
Agreement. In the event such good faith efforts are not completed before the expiration
of the Term, or in the event either party gives notice to the other during the Negotiation
Period of its decision not to enter into a further term, this Agreement may be extended
for not more than ninety (90) days after the giving of such notice or December 31, 2014,
whichever is later, upon the written authorization of the Executive Director of the
Authority. Good faith negotiations may include an extension of this Agreement up to an
additional 24 months provided there are no changes in the terms or Manager
Compensation detailed herein.
(c) No Evergreen Clause: Nothing in this Agreement or otherwise
creates any "Evergreen clause" nor creates any rights by any party to an extension of
this Agreement, or any provision thereof, for any period, or at all, except as expressly
stated herein.
(d) Bankruptcv. In the event that a petition in bankruptcy is filed by
either of the Parties, or in the event that either makes an assignment for the benefit of
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creditors to take advantage of any insolvency act, this Agreement shall automatically
terminate.
(e) Sale of Properties. This Agreement shall automatically terminate,
upon the sale of the Properties, or as to any Property, on the sale of such Property.
(f) Addition of Properties. In the event the Authority adds a
property to their operations portfolio, Manager and Authority's designee may agree in
writing to amend Exhibit A for the inclusion of said property. Such amendment shall be
subject to the terms and conditions herein from the effective date of the amendment.
(g) Exchanqe of Documents. Upon termination, the Manager will
submit to the Authority any financial statements requested by the Authority and, after
the Parties have accounted to each other with respect to all matters outstanding as of
the date of termination, the Authority will furnish the Manager security in form and
principal amount satisfactory to the Manager against any obligations or liabilities which
the Manager may properly have incurred on behalf of the Authority hereunder. All of the
cash trust accounts, investments, equipment and records for the Properties will be
turned over to the Authority within 30 days of the date this Agreement is terminated.
The Parties hereby covenant and agree that the Authority shall own the books and
records for the Properties and that the Manager shall hold the books and records for the
Properties for the benefit of the Authority.
29. Manager's Indemnification. Subject to the Manager's indemnification
obligations hereunder as set forth in Section 24, the Parties understand and agree:
(a) That the Authority has assumed and will maintain its responsibility
and obligation through the term of this Agreement for the finances and the financial
marketability of the Properties; and
(b) That the Manager shall have no obligation, responsibility or liability
to fund authorized costs, expenses, or accounts other than those funds generated by
the Properties themselves or provided to the Properties or to the Manager by the
Authority. In accordance with the foregoing, the Authority agrees that the Manager shall
have the right at all times to withdraw payment of its compensation, as provided for
under Section 27 of this Agreement, from the General Operating account or accounts,
immediately when such compensation is due and without regard to other property
obligations or expenses conditioned on the Manager having satisfactorily discharged all
duties and responsibilities under this Agreement. Moreover, the Authority hereby
indemnifies the Manager and agrees to hold it harmless with respect to costs,
expenses, accounts, liabilities and obligations of the Properties during the Term of this
Agreement and further agrees to guarantee to the Manager the payment of its
compensation under Section 27 of this Agreement during the term of this Agreement to
the extent that the Operating and Maintenance Account for the Properties are
insufficiently funded for this purpose. Failure of the Authority at any time to abide by
and to fulfill the foregoing shall be a breach of this Agreement entitling the Manager to
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obtain from the Authority, upon demand, full payment of all compensation owed to the
Manager through the date of such breach.
30. Prohibition Against Assiqnment and Subcontractinq Mana. ec�ment
Services. Manager shall not assign this Agreement or subcontract any management or
other services, without the express prior written consent of the Authority.
31. Notices. Except as otherwise provided by law, any and all notices or other
communications required or permitted by this Agreement or by law to be served on or
given to either Party to this Agreement to the other Party shall be given in writing. All
such notices or other communications shall be deemed duly served and given when
personally delivered to the Party to whom they are so directed, or in lieu of personal
service when deposited in the United States mail, first-class postage prepaid,
addressed to the respective Party as set forth below:
To the Authority:
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, California 92260-2578
Attention: Janet Moore
With a copy to:
Richards, Watson & Gershon
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071-3101
Attention: William L. Strausz
To the Manager:
RPM Company Apartment Management Services
1420 S. Mills, Suite M
Lodi, California 95242
Attention: Mr. Donnie Garibaldi
Either Party may change its address for the purpose of this Section 31 by giving
written notice of the change to the other Party in the manner provided in this Section.
32. General Provisions.
(a) Bindinq on Successors and Assiqns. At all times, this Agreement
will enure to the benefit of and constitute a binding obligation upon the Parties and their
respective successors and assigns.
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DRAFT — FOR DISCUSSION PURPOSES ONLY
(b) Entire Aareement and Allowable Changes. This Agreement
constitutes the entire Agreement between the Authority and the Manager with respect to
the management and operation of the Properties, and all prior agreements between the
Authority and the Manager regarding the subject matter of this Agreement are hereby
superseded and replaced. Changes hereto in the case of contract sections, must be
made by supplemental written agreement signed by the Parties. Exhibits hereto may be
amended as necessary by the written agreement of the Parties.
(c) Attornevs' Fees. If any litigation is commenced between the Parties
concerning the Properties, this Agreement, or the rights and duties of either Party with
respect to this Agreement, the Party prevailing in the litigation shall be entitled, in
addition to any other relief that may be granted in the litigation, to a reasonable sum as
and for its attorneys' fees and costs in the litigation that shall be determined by the court
or in a separate action brought for that purpose.
(d) Ambi uiq ties. Each Party and their counsel have participated fully in
the drafting of this Agreement. Any rule of construction to the effect that ambiguities are
to be resolved against the drafting Party shall not apply in interpreting this Agreement.
(e) Severability of Agreement. If a court or an arbitrator of competent
jurisdiction holds any provision of this Agreement to be illegal, unenforceable or invalid
in whole or in part for any reason, the validity and enforceability of the remaining
provisions, or portions of them will not be affected.
(f) Approval bv Authoritv. Whenever a provision of this Agreement
requires the delivery of documents or reports, notifications, determinations,
reimbursements or requests for funding, review, authorization or approval of the
Authority, such approval may be given by the Executive Director of the Authority or
his/her designee.
(g) Word Usaae. Unless the context clearly requires otherwise, (a) the
plural and singular numbers shall each be deemed to include the other; (b) the
masculine, feminine, and neuter genders shall each be deemed to include the others;
(c) "shall," "will," or "agrees" are mandatory, and "may" is permissive; (d) "or" is not
exclusive; and (e) "includes" and "including" are not limiting.
///
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DRAFT— FOR DISCUSSION PURPOSES ONLY
IN WITNESS THEREOF, the Parties have executed this Agreement on the date
first above written.
Manager: Authority:
RAY, DOUGLAS, ANN & PATRICK, INC., PALM DESERT HOUSING AUTHORITY, a
a California corporation, dba public body, corporate and politic
RPM Company Apartment
Management Services
By:
By: Title: Chairman
Title:
ATTEST:
By:
Title:
Rachelle D. Klassen, Secretary
APPROVED AS TO FORM:
William L. Strausz, Authority Counsel
Richards, Watson and Gershon
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DRAFT— FOR DISCUSSION PURPOSES ONLY
EXHIBIT A
(PROPERTIES)
PALM DESERT HOUSING AUTHORITY
AFFORDABLE HOUSING UNITS
PROJECT DESCRIPTION
1. One Quail Place
72-600 Fred Waring Drive
156-one bedroom, 228-two bedroom (384 Total Units)
Amenities: Gated Community, 4 Pools, 4 Spas, 4 Tennis Courts, Head
Start Day Care Center, Community Courtyard with Picnic Area, Children's
Play Area, Resident Library, Laundry Facilities and Covered Parking
2. Desert Pointe
43-805 Monterey Avenue
34-studio, 24-one bedroom, 6-two bedrooms (64 Total Units)
Amenities: Pool, Children's Play Area, Gathering Area, Laundry
Facilities and Covered Parking
3. Neighbors Apts.
73-535 Santa Rosa Way
24-two bedrooms (24 Total Units)
Amenities: Pool, Laundry Facilities and Covered Parking
4. The Pueblos Apts.
73-695 Santa Rosa Way
15-one bedroom units (15 Total Units)
Amenities: Pool, Adjacent Community/Resident Services Building,
Laundry Facilities and Covered Parking
5. Catalina Gardens
73-600A Catalina Way
48-studios, 24-one bedroom (72 Total Units)
Amenities: Pool, Laundry Facilities, Covered Parking and
Community/Resident Services Building
6. Taos Palms
44-830 Las Palmas Avenue
16-two bedroom (16 Total Units)
Amenities: Gated Community with Telephone Entry Access, Pool,
Laundry Facilities and Privacy Railings
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DRAFT— FOR DISCUSSION PURPOSES ONLY
7. Las Serenas
73-315 Country Club Drive �
100-one bedroom, 50 one-bedroom + Den (150 Total Units)
Amenities: Resident Service Building, Computer Room with Internet
Access, 3 Pools, 1 Spa, Laundry Facilities and Covered Parking
8. Laguna Palms
73-875 Santa Rosa
4 studios, 16 one-bedroom, 28 two-bedroom (48 Total Units)
Amenities: Pool, Laundry Facilities, Community Gathering Area
9. California Villas
77-107 California Drive
140 one-bedroom, 1 two-bedroom (141 Total Units)
Amenities: Resident Service Building, Computer Room with Internet
Access, Library, Pool, Spa and Laundry Facilities
10. Palm Village Apartments
73-650 Santa Rosa Way
36 two-bedroom (36 Total Units)
Amenities: Laundry Facilities and Covered Parking
11. Candlewood Apartments
74000-74002 Shadow Mountain Drive
26 one-bedroom, 4 two-bedroom (30 Total Units)
Amenities; Laundry facilities, Pool and a Spa
12. La Rocca Villas
42-135 Golden Eagle Lane
27 one-bedroom (27 Total Units)
Amenities: Laundry Facility, Resident Service Building, Common Area,
Covered Parking and ADA Accessibility
13. Sagecrest Senior (includes vacant property to the North and West)
73-811 Santa Rosa Way
14 Studios (14 Total Units)
Amenities: Covered Carport Parking, Community Courtyard, Elevator
14. Desert Rose/Falcon Crest Single Family Residences
Various locations throughout the developments which are owned by the
Authority. Specific units will be assigned during the term of the agreement
by written amendment to this Exhibit.
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DRAFT— FOR DISCUSSION PURPOSES ONLY
EXHIBIT B
[intentionally omitted]
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DRAFT — FOR DISCUSSION PURPOSES ONLY
EXHIBIT C
MANAGEMENT OFFICES
Location of Manaaement Offices Locations Manac�ed
One Quail Place One Quail Place
(located in management office)
Las Serenas Las Serenas and La Rocca Villas
(located in management office)
Catalina Gardens Catalina Gardens, The Pueblos,
(located in management office) Candlewood Apartments, and Sagecrest
Senior
Desert Pointe Desert Pointe, Taos Palms and
(located in management office) Neighbors Apartments
California Villas California Villas
(located in management office)
Laguna Palms Laguna Palms and Palm Village
(located in management office) Apartments
DRAFT — FOR DISCUSSION PURPOSES ONLY
EXHIBIT D
DEPOSIT ACCOUNTS
The following security deposit accounts shall be maintained by the Manager for
the benefit of the Authority:
Union Bank of California
Palm Desert Housing Authority - Security Deposit Account
#2170-001047
The following operating deposit accounts shall be maintained by the Manager for
the benefit of the Authority:
Union Bank of California
Palm Desert Housing Authority - Operating Account
#2170-001039
DRAFT — FOR DISCUSSION PURPOSES ONLY
EXHIBIT E
NON-COLLUSIVE AFFIDAVIT FORM
AFFIDAVIT
State of California )
)ss.
County of Riverside )
, being first duly sworn, deposes and says:
That he is , the party making the foregoing proposal
or bid, that such proposal or bid is genuine and not collusive or sham; that said bidder
has not colluded, conspired, connived or agreed, directly or indirectly, sought by
agreement or collusion, or communication or conference, with any person, to fix the bid
price or affiant, or of any other bidder or to fix any overhead profit or cost element of
said bid price, or that of any other bidder or to secure any advantage against the
or any person interested in the
proposed contract, and that all statements in said proposal or bid are true.
Signature of Person Making Affidavit:
Subscribed and sworn to me this day of , 20
My commission expires , 20
Notary Public Signature:
Official Seal:
DRAFT — FOR DISCUSSION PURPOSES ONLY
EXHIBIT F
PROPERTY STAFFING & SALARY RANGES
To be provided annually with the property budgets.
DRAFT — FOR DISCUSSION PURPOSES ONLY
EXHIBIT G
PERFORMANCE CRITERIA
1. PROPERTY PORTFOLIO NET OPERATING INCOME COMPARISON
Current Budget Year: July - June
� Budgeted vs. Actual = Variance
� Vacancy Rate Analysis
2. RESPONSE TO RESIDENT COMPLAINTS
� Response to service requests/turn around time
� Response to resident complaints and concerns - monthly meetings
� Response to resident complaints and concerns at site office
3. COMPLIANCE WITH AGREEMENT
� Define any notable gross disparities from the Agreement on the
following:
� Report preparation and submittal promptness
� Responsiveness to Authority requests
� Method of accounting
4. CAPITAL IMPROVEMENTS SCHEDULE
� Deferred Capital Improvement Schedule
� Capital Improvement Program
� Maintenance and general appearance of properties
5. OPERATIONS
� Operational procedures to be audited
� Compliance with Stipulation
Compliance with all laws including those related to property
management, Fair Housing, and housing authorities
� Recertification
� Internal controls
� Contract controls
DRAFT — FOR DISCUSSION PURPOSES ONLY
6. ACCOUNTING AUDIT
� Review of Annual Audit Findings
� Quarterly Audits
7. AFFORDABLE HOUSING PROGRAM
� Housing Authority goals
� Management Company goals
� Program implementation
% Compliance with local, state and Federal regulations
� Tenant Household Income Analysis
8. RESIDENT RELATIONS
� Review summary responses of any resident surveys
� Establishment of Tenant Exit Survey
9. GENERAL
� General overview of previous operational year
32
DRAFT— FOR DISCUSSION PURPOSES ONLY
EXHIBIT H
LIST OF FINANCIAL REPORTS REQUIRED
Monthly Reports
1. Payroll register and invoices (may be submitted after every payroll or
monthly)
2. Management Fee Report that includes Vacancies/Current Rental Activity
submitted with invoice
3. Disbursement/Expense Journals for each check run
4. General Ledgers for all Properties
5. Check Registers for all Properties
6. Monthly Bank Reconciliations with Outstanding Check Registers
7. Balance Sheets and/or Trial Balances for all Properties
8. Rent Rolls for all Properties
9. Delinquent A/R for all Properties
10. Prepaid Listing for all Properties
11. Income Statements with Monthly Budget Variance as well as Annual
Variance
12. Monthly Adjusting Journals
13. Cash Receipts Journals
Quarterly Reports
1. Security Deposit List for all Properties (If not included in the monthly rent
roll)
2. Status Report on Items over 90 days (Requests to the Board for write offs,
etc.)
DRAFT— FOR DISCUSSION PURPOSES ONLY
Annual Reports Required
At Fiscal Year End:
1. Schedule of Accounts Payable
2. Schedule of Accounts Receivable
3. Inventory of all Agency and Authority personal property and readily
removable fixtures attached to the Properties
4. Preliminary sets of Monthly closing reports, when requested
5. Once audited, Final Set of all June Closing Reports
6. Schedule of Security Deposits Matching the Cash Held
7. The Report described in Section 21
At Calendar Year End:
8. Copies of the transmittals for Federal Reporting Requirements for W-2's
and 1099's
Analytical Reports:
9. Upon request of the Authority, reports analyzing various information required in
the above Financial Reports (May include summaries of all properties and/or
multi-year information).
DRAFT — FOR DISCUSSION PURPOSES ONLY
EXHIBIT I
Leasing Reports
1. Monthly Occupancy and Average Rent Statement
2. Monthly Net Operating Income Statement
3. Replacement Lists maintained continuously due at least once annually on
June 30.
4. Resident Demographics Report
5. Service Request and Serious Complaints
6. Other reports as requested or as necessary to perform the requirements of
the Agreement.
DRAFT — FOR DISCUSSION PURPOSES ONLY
EXHIBIT J
On-going services requiring written cost estimates include any required in Section 21 of
the Management Agreement as well as:
1. Landscape Contracts
a. Monthly Services �
b. Annual Services including tree trimming, overseeding, and perennial
flowers
2. Pest Control
3. Pool Services
4. Replacement Carpet and Vinyl
5. Laundry Services
6. Air Conditioning/Heating Unit Replacements
7. Carpet Cleaning
A vendor list may be created and approved by the Authority Board pursuant to Section
3.32.110 of the Municipal Code and may satisfy the above requirements.
Note: Due to the availability of vendors when services are required, more than one
vendor may be authorized by the Authority for said services.
DRAFT - FOR DISCUSSION PURPOSES ONLY
EXHIBIT K
NON-EXCLUSIVE LIST OF REQUIRED AND PERMISSIVE BACKGROUND CHECK
INFORMATION BY TYPE OF FUNDING
SOURCE INFORMATION FEDERAL FUNDS INVOLVED FEDERAL FUNDS NOT INVOLVED
OFiNFO
INVESTIGATIO DISCLOSURE INVESTIGATIO DISCLOSURE
N 8t CONSEN'i' N �4c CONSENT
Law Illegal Drug Use Required Housing May obtain Must notify
enforcemen Auth. must applicant, if
tagencies require & basis for
applicant denial
must consent
Dntg Use that InterFeres with Rec{uired Housing May obtain Must notify
Health&Safety of Others Auth. must applicant, if
require & basis for
applicant denial
must consent
Sex Offenses Required Housing May obtain Must notify
Auth. must applicant, if
require & basis for
applicant denial
must consent
"Serious"crimes May obtain Must notify May obtain Must notify
applicant, if applicant, if
• murder, mayhem, basis for basis for
rape,burglary denial denial
• hate crimes
• offenses re firearms!
explosives
• felonies involving
drugs,alcohol
• domestic violence
Juvenile Records Prohibited N/A Prohibited N/A
Arrests Not Resulting in Prohibited N/A Prohibited N/A
Conviction
State / Social Security Numbers Required Housing May Obtain Application
Federal Auth. must must indicate
Governmen require & disclosure is
t applicant voluntary
must consent
Citizenship/Residency Info Required Housing Pmhibited N/A. But, if
Auth. must Housing
require & Auth. Has
applicant unsolicited
must consent evidence that
applicant is
undocumente
d, it must
reject the
application
DRAFT — FOR DISCUSSION PURPOSES ONLY
SOURCE INFORMATION FEDERAL FUNDS INVOLVED FEDERAL FUNDS NOT INVOLVED
OF 1NF0
INVESTIGATIO DISCLOSURE INVESTIGATIO DISCLOSURE
N &CONSENT N &CONSENT
Income/family composition& Required Housing Required Housing
tax info,to verify eligibiliry Auth. must Auth. must
reyuire & require &
applicant applicant
must consent must consent
Credit Investigative Consumer Report May Obtain Housing May Obtain Housing
Agencies Authority Authority
• Credit History must notify must noUfy
• Character applicant applicant
• Reputation
• Personal
chaiacteristics
• Mode of livin
• Convictions May Obtain, Housmg May Obtain, Housing
• Civil Actions but only if Authority but only if Authority
• Tax Liens credit agency must notify credit agency must notify
• Outstanding has verified applicant has verified applicant
Judgments info within 30d info within 30d
of disclosure of disclosure
• Banlwptcies more Prohibited N/A Prohibited N/A
than l0y prior
• Civil judgments
more than 7 old
Public Relevant background May Obtain Must notify May Obtain Must notify
Records information applicant, if applicant, if
Obtained basis for basis for
From Other • Creditworthiness denial. denial.
Sources; • Credit standing Consent Consent
Interviews • Credit capacity recommende reconunended
with • Civil actions d. .
Neighbors, • Convictions
Friends & • Tax Liens
Associates • Outstanding
ludgments
• Character
• General Reputation
• Personal
chacacteristics
• Mode of Livin
In addition to credit reporting agencies, background check information may be obtained
from Westlaw, Lexis, DataQuick, Merlin, Choice Point, and similar reputable resources.
SAMPLE CONSENT BY APPLICANT
"I understand that the Housing Authority or its agent will perform a background check as a part of
determining eligibility, including but not limited to obtaining information concerning my employment, credit
history, benefits, income, assets, and criminal history, and by my signature below, I hereby authorize the
Housing Authority or its agent to do so.""I certify that the statements on this application are true and
complete to the best of my knowledge and belief and I understand that they will be verified. I understand
that any false statements made on this application or failure to make any required disclosures may cause
me to be disqualified from initial or continuing eligibility for housing assistance and may result in eviction. I
further understand that I am under a continuing obligation to inform the Housing Authority or its agent of
any changes to any of the information provided in this Application, and that failure to promptly inform the
Housing Authority or its Agent of any changes may cause me to be disqualified from initial or continuing
eligibility for housing assistance and may result in eviction."