HomeMy WebLinkAboutItem 1OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
TO THE SEAL BEACH REDEVELOPMENT AGENCY
AGENDA STAFF REPORT
DATE: November 17, 2016
TO: Oversight Board Members
FROM: Victoria L. Beatley, Staff Member
SUBJECT: AMENDMENT NO. 1 TO ADMINISTRATION AND
OVERSIGHT AGREEMENT TO APPOINT A
SUCCESSOR OVERSIGHT AGENT IN CONNECTION
WITH BOND AND AGENCY REGULATORY
AGREEMENTS FOR SEAL BEACH SHORES MOBILE
HOME PARK
SUMMARY OF REQUEST:
That the Oversight Board of the Successor Agency to the Seal Beach
Redevelopment Agency (the "Successor Agency ") adopt Resolution No. OB 16-
03, authorizing the execution and delivery of Amendment No. 1 to Administration
and Oversight Agreement to appoint a successor Oversight Agent and Program
Administrator, and taking related actions.
BACKGROUND AND ANALYSIS:
The former City of Seal Beach Redevelopment Agency (the "Former Agency')
issued bonds (the "Bonds ") in 2000 and provided other financial assistance to
LINC Community Development Corporation (the "LINC ") for a mobile home park
project, now known as Seal Beach Shores (the "Park "). In that connection, the
Former Agency and LINC entered into regulatory agreements, requiring the Park
to comply with certain affordable housing covenants and reporting requirements.
Seal Beach Shores, Inc. is the successor to LINC with respect to the Park.
The related documents included an Administration and Oversight Agreement,
dated December 1, 2000 (the "Oversight Agent Agreement "), designating the
appointment of an Oversight Agent and Program Administrator (the "Oversight
Agent") to assist with the monitoring of the Park's compliance. The maintenance
of an Oversight Agent is required under the Bonds indenture (i.e., the contract
that contains the Agency's covenants to the bondholders). The Bonds are still
outstanding, and indenture remains to be an enforceable obligation of the
Successor Agency.
Agenda Item 1
Rosenow Spevacek Group Inc. ( "RSG ") has acted as the Oversight Agent since
2000. With RSG's recent notice of resignation, Staff has identified CivicStone,
Inc., as a suitable replacement. On October 24, 2016, the Board of Directors of
the Successor Agency adopted Resolution No. SA16 -03, approving the
Successor Agency's execution and delivery of an amendment to the Oversight
Agent Agreement ( "Amendment No. 1 to Oversight Agent Agreement') for the
appointment of CivicStone, as the replacement Oversight Agent, subject to the
Oversight Board's effective approval.
Pursuant to Health and Safety Code Section 34181(e), the Oversight Board may
approve an amendment to an agreement between the Former Agency (as
succeeded by the Successor Agency) and a private parry if the Oversight Board
finds that the amendment would be in the best interests of the taxing entities.
Pursuant to the Indenture, the periodic fee due to the Oversight Agent and the
Program Administrator, in the form of the "Administration Fee," is paid by the
Trustee with moneys deposited with the Trustee by the Borrower. Because the
appointment of a successor Oversight Agent is necessary and required under the
Indenture, the Successor Agency's execution and delivery of Amendment No. 1
to Oversight Agent Agreement will reduce potential liability of the Successor
Agency. Because any cost incurred for liability of the Successor Agency would
be payable from the Redevelopment Property Tax Trust Fund (and potentially
reducing residuals to be passed onto the taxing entities after payment of
enforceable obligations), the approval of the Successor Agency's execution and
delivery of Amendment No. 1 to Oversight Agreement is in the best interests of
the taxing entities.
FISCAL IMPACT:
Under the current documents, the periodic fee due to the Oversight Agent in the
form of the "Administration Fee," is paid by the Bonds trustee with moneys
deposited with the Bonds trustee by Seal Beach Shores. Staff does not
anticipate any request of additional moneys from the Redevelopment Property
Tax Trust Fund in connection with this appointment.
RECOMMENDATION
That the Oversight Board of the Successor Agency adopt Resolution No. OB 16-
03, authorizing the execution and delivery of Amendment No. 1 to Administration
and Oversight Agreement to appoint a successor Oversight Agent and Program
Administrator and taking related actions.
Attachment:
Resolution No. OB16 -03 (with Exhibit A — Amendment No. 1 to Administration
and Oversight Agreement)
Page 2
RESOLUTION NUMBER OB16-03
A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR
AGENCY TO THE SEAL BEACH REDEVELOPMENT AGENCY
APPROVING THE SUCCESSOR AGENCY'S EXECUTION OF
AMENDMENT NO. 1 TO ADMINISTRATION AND OVERSIGHT
AGREEMENT FOR THE APPOINTMENT OF A SUCCESSOR
OVERSIGHT AGENT AND PROGRAM ADMINISTRATOR AND TAKING
RELATED ACTIONS
RECITALS:
A. The former City of Seal Beach Redevelopment Agency (the "Former
Agency') was a redevelopment agency duly formed pursuant to the Community
Redevelopment Law, set forth in Part 1 of Division 24 of the California Health and
Safety Code ( "HSC ").
B. Pursuant to AB X1 26 (enacted in June 2011) and the California Supreme
Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et
al., 53 Cal. 4th 231 (2011), the Former Agency was dissolved as of February 1, 2012,
the Successor Agency was constituted as the successor entity to the Former Agency,
and the Oversight Board of Successor Agency (the "Oversight Board ") was established.
C. AB X1 26 added Part 1.8 (commencing with Section 34161) and Part 1.85
(commencing with Section 34170) to Division 24 the HSC. Such Parts 1.8 and 1.85,
together with amendments and supplements thereto enacted from time to time, are
collectively referred to herein as the "Dissolution Act."
D. Before the Former Agency's dissolution, the Former Agency entered into
an Administration and Oversight Agreement, dated as of December 1, 2000 (the
"Oversight Agent Agreement "), by and among the Former Agency, LINC Community
Development Corporation ( "LINC ") and Rosenow Spevacek Group Inc. ( "RSG "), as
Oversight Agent and Program Administrator thereunder.
E. The Former Agency entered into the Oversight •Agent Agreement in
connection with the Former Agency's issuance of its Mobile Home Park Revenue Bonds
(Seal Beach Mobile Home Park Project) Series 2000A (the "Bonds ") and its execution
and delivery of the related Indenture of Trust, dated as of December 1, 2000 (the
"Indenture "), by an between the Former Agency and Union Bank of California, N.A., as
trustee (the "Trustee "). Capitalized terms used but not defined herein have the
meanings ascribed to them in the Oversight Agent Agreement, or if not in the Oversight
Agent Agreement, the Indenture.
F. Seal Beach Shores, Inc., is the successor -in- interest to LINC, as the
Borrower under the Indenture, the Oversight Agent Agreement and other related
documents.
12805- 0005 \1989616v3.doc
Resolution Number OB16 -03
G. A portion of the Bonds remains outstanding; and the Bonds, the Indenture
and the Oversight Agent Agreement continue to be enforceable obligations of the
Successor Agency.
H. RSG has given notice of its resignation from the positions of the Oversight
Agent and the Program Administrator.
I. The Successor Agency desires to execute an amendment, substantially in
the form attached as Exhibit A ( "Amendment No. 1 to Oversight Agent Agreement "), to
provide for the appointment of CivicStone, Inc. ( "CivicStone ") as the successor
Oversight Agent and the Program Administrator.
J. Pursuant to the Indenture, the periodic fee due to the Oversight Agent and
the Program Administrator, in the form of the "Administration Fee," is paid by the
Trustee with moneys deposited with the Trustee by the Borrower.
K. The appointment of a successor Oversight Agent and Program
Administrator is necessary and required under the Indenture, and, as such, the
Successor Agency's execution and delivery of Amendment No. 1 to Oversight Agent
Agreement will reduce liability of the Successor Agency.
L. Pursuant to HSC Section 34181(e), the Oversight Board may approve an
amendment to an agreement between the Former Agency (as succeeded by the
Successor Agency) and a private party if the Oversight Board finds that the amendment
would be in the best interests of the taxing entities.
NOW, THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR
AGENCY TO THE SEAL BEACH REDEVELOPMENT AGENCY HEREBY FINDS,
DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
Section 1. The above recitals are true and correct and are a substantive part
of this Resolution.
Section 2. In view that the purpose of Amendment No. 1 to Oversight Agent
Agreement is to fulfill Indenture requirements by the appointment of a successor
Oversight Agent and Program Administrator, and thus reduce the liability of the
Successor Agency, the Oversight Board hereby finds and determines, for the purposes
of HSC Section 34181(e), that the Successor Agency's execution and delivery of
Amendment No. 1 to Oversight Agent Agreement is in the best interests of the taxing
entities.
Section 3. The Oversight Board hereby approves the Successor Agency's
execution and delivery of Amendment No. 1 to Oversight Agent Agreement,
substantially in the form attached as Exhibit A to this Resolution.
Section 4. The members of the Oversight Board and officers of the Successor
Agency are hereby authorized, jointly and severally, to do any and all things which they
Resolution Number OB16 -03
may deem necessary or advisable to effectuate this Resolution and the Oversight Agent
Agreement, as amended by Amendment No. 1 to Oversight Agent Agreement.
PASSED, APPROVED AND ADOPTED by the Oversight Board at a meeting
held on the 17 day of November 2016.
AYES: Board Members:
NOES: Board Members:
ABSENT: Board Members:
Chair, Oversight Board
ATTEST:
Secretary, Oversight Board
Resolution Number OB16 -03
EXHIBIT A
AMENDMENT NO. 1 TO OVERSIGHT AGENT AGREEMENT
(in substantial final form)
(see attached)
AMENDMENT NO. 1
(to Administration and Oversight Agreement)
This Amendment No. 1 (this "Amendment "), dated as of , 2016 (the
"Effective Date "), is entered into by and among the Successor Agency to the Seal Beach
Redevelopment Agency (the "Successor Agency "), as successor to the former Seal Beach
Redevelopment Agency (the "Former Agency "), the City of Seal Beach, a municipal
corporation duly existing under the laws of the State of California (the "City "), Seal Beach
Shores, Inc., a California nonprofit public benefit corporation ( "SBS" or "Borrower "), as the
successor -in- interest to LINC Community Development Corporation, a California nonprofit
public benefit corporation ( "LINC ") and CivicStone, Inc., a California Corporation
(`CivicStone "), as successor Oversight Agent and Program Administrator.
This Amendment amends and supplements the Administration and Oversight Agreement,
dated as of December 1, 2000 (the "Original Agreement "), by and among the Former Agency,
LINC and Rosenow Spevacek Group Inc. ( "RSG "), as former Oversight Agent and Program
Administrator. Capitalized terms used but not otherwise defined herein have the meanings
ascribed to them in the Original Agreement.
RECITALS
A. The Former Agency was a redevelopment agency duly formed pursuant to the
Community Redevelopment Law, set forth in Part 1 of Division 24 of the California Health and
Safety Code ( "HSC ").
B. Pursuant to AB Xl 26 (enacted in June 2011) and the California Supreme Court's
decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th
231 (2011), the Former Agency was dissolved as of February 1, 2012, the Successor Agency was
constituted as the successor entity to the Former Agency, and an Oversight Board of the
Successor Agency (the "Oversight Board ") was established.
C. AB Xl 26 added Part 1.8 (commencing with Section 34161) and Part 1.85
(commencing with Section 34170) to Division 24 of the HSC. Such Parts 1.8 and 1.85,
including amendments and supplements enacted after AB X1 26, are referred to herein as the
"Dissolution Act."
D. Before the Former Agency's dissolution, the Former Agency entered into the
Original Agreement in connection with the issuance of the Former Agency's Mobile Home Park
Revenue Bonds (Seal Beach Mobile Home Park Project) Series 2000A (the "Bonds ") and the
related execution and delivery of the Indenture of Trust, dated as of December 1, 2000 (the
"Indenture "), by an between the Former Agency and Union Bank of California, N.A., as trustee.
E. A portion of the Bonds remains outstanding; and the Bonds, the Indenture and the
Original Agreement (as amended by this Amendment) continue to be enforceable obligations of
the Successor Agency.
F. RSG resigned from its positions as the Oversight Agent and the Program
Administrator.
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12805- 0005 \1989566v6.dm RWG DRAFT: 10/8/2016
G. The Parties are executing this Amendment to provide for CivicStone's assumption
of the roles of Oversight Agent and Program Administrator.
H. Pursuant to the Indenture (as set forth in the definition of "Oversight Agent" in
Section 1.1 thereof), so long as the Bonds remain outstanding, the appointment of any successor
Oversight Agent is subject to the consent of ACA, which consent has been obtained and is
attached hereto as Exhibit A.
I. The Oversight Board adopted Resolution No. (the "Oversight Board
Resolution "), approving the Successor Agency's execution and delivery of this Amendment; and
the Oversight Board Resolution became effective upon the State Department of Finance's
[approval] [deemed approval] pursuant to the Dissolution Act.
THE PARTIES, FOR AND IN CONSIDERATION OF THE MUTUAL
PROMISES AND AGREEMENTS HEREIN CONTAINED DO AGREE AS FOLLOWS:
1. Administration Agreement to Remain in Effect Except as Amended Hereby.
Except as expressly modified by this Amendment, the Original Agreement shall remain
unmodified and in full force and effect in accordance with its terms. The Original Agreement, as
amended by this Amendment, shall be hereinafter referred to as the "Administration
Agreement."
2. Appointment and Acceptance by CivicStone of its Duties as Program
Administrator and Oversight Agent.
(a) The Successor Agency and SBS, as the Borrower, hereby confirm and
agree to the appointment of CivicStone as the successor Program Administrator and Oversight
Agent.
(b) CivicStone hereby accepts such appointment, and agrees to perform the
duties of the Program Administrator and Oversight Agent as set forth in the Original Agreement,
and accepts the terms of the Original Agreement (except, it is clarified that: (i) Section 5.4 shall
be amended as provided below and (ii) Section 2.3 of the Original Agreement contains
representations by RSG and not CivicStone, and CivicStone's representation is set forth below in
this Amendment).
(c) It is hereby clarified and affirmed by the Parties that the annual
Administration Fee at [October] 2016 is $8,319.21, calculated in accordance with the definition
of "Administration Fee" set forth in the Indenture, and further described in Exhibit B hereto.
CivicStone shall submit invoices for its work under the Administration Agreement to the Trustee
in amounts not exceeding the Administration Fee (as adjusted pursuant to such definition),
except as may be accepted in writing by the Executive Director of the Successor Agency and an
authorized representative of the Borrower (with a copy of such acceptance furnished to the
Trustee).
3. Representations of CivicStone. CivicStone makes the following
representations, warranties and acknowledgments:
-2-
12805- 0005V19895666.da
(a) It is a corporation duly organized, validly existing and in good standing
under the laws of the State of California and has the power and authority to carry on its business
as now being conducted.
(b) It has the power to execute and deliver this Amendment and to cant' out
the transactions on its part contemplated in the Administration Agreement; and it has duly
authorized the execution and delivery of this Amendment and its performance under the
Administration Agreement.
(c) It is independent from and not under the control of the Borrower, does not
have any substantial interest, direct or indirect, in the Borrower, and is not an officer or
employee of the Borrower.
(d) CivicStone is entering into the Administration Agreement as an
independent contractor to the Successor Agency. Neither CivicStone nor any of its staff are the
employees of the Successor Agency. The Successor Agency has no control over the conduct of
CivicStone, in its capacity as the Program Administrator and Oversight Agent, except in
accordance with the provisions of the Administration Agreement, the Indenture, the Loan
Agreement, the Regulatory Agreement, the Agency Grant Agreement (as amended and restated
in August 2005), and the Agency Regulatory Agreement pertaining to the duties of the Program
Administrator and Oversight Agent.
(e) It has received copies each of the Administration Agreement, the
Indenture, the Loan Agreement, the Regulatory Agreement, the Agency Grant Agreement (as
amended and restated in August 2005), and the Agency Regulatory Agreement (as amended in
August 2005) and it is familiar with the teens and conditions thereof and is qualified to perform
its duties as the Program Administrator and Oversight Agent pursuant to the terms thereof.
(f) It has received from the Borrower copies of the Articles of Incorporation,
Bylaws and Declaration of Conditions, Covenants and Restrictions, which the Borrower has
represented are current operating documents of SBS as of the date of this Amendment.
4. Amendment to Section 5.4 of the Original Agreement. The last sentence of
Section 5.4 of the Original Agreement is hereby replaced in its entirety with the following: The
Notice Address of the Program Administrator and Oversight Agent is: 4195 Chino Hills
Parkway #267, Chino Hills, CA 91709; Attention: Monique Eliason.
5. Certain Clarifications Regarding Annual Certifications and Files.
(a) With respect to the income certification and the annual report required to
be filed by the Borrower under the Regulatory Agreement, the filing of such certification and
reports to the Program Administrator and Oversight Agent shall be deemed to be a transmission
to the Successor Agency at the same time, and the Borrower shall not be required to make a
duplicate transmission to the Successor Agency.
(b) The transmission to the Program Administrator and Oversight Agent of
file information regarding any Residential Household at the Successor Agency's request shall be
-3-
12805 -0005\ 1 989566v6.dw
deemed to be a transmission to the Successor Agency at the same time, and the Borrower shall
not be required to make a duplicate transmission to the Successor Agency.
(c) To the extent that the Program Administrator and the Oversight Agent
prepares and submit to the Successor Agency quarterly or annual continuing program
compliance summary reports required by the Regulatory Agreement or the Agency Regulatory
Agreement, the Borrower shall be furnished with a copy of each such report.
(d) The Program Administrator and Oversight Agent shall retain all files,
books and records received by it in connection with its performance as the Program
Administrator and Oversight Agent in good order and shall make such files, books and records
available to the Successor Agency for inspection at any time during business hours upon the
Successor Agency's request.
(e) Upon the Borrower's request, the Program Administrator and Oversight
Agent shall furnish to the Borrower copies of any certification or filings previously transmitted
by the Borrower; provided, that the Borrower shall reimburse the Program Administrator and
Oversight Agent for costs relating to such copies.
(f) Upon the Successor Agency's or Program Administrator and Oversight
Agent's request, the Borrower shall furnish to the requesting party duplicate copies of any
certification or filings, including without limitation, Household files previously transmitted by
the Borrower, provided, that the requesting party shall reimburse the Borrower for costs relating
to such copies.
6. Execution in Counterparts. This Amendment may be executed in counterparts,
and all such executed counterparts shall constitute the same instrument. It shall be necessary to
account for only one set of such counterparts in proving this Amendment.
Ell
12 805 -0005\ 1 9895660.dce
IN WITNESS THEREOF, the Parties have caused this Amendment to be executed by
their duly authorized representatives as of the Effective Date indicated above.
SUCCESSOR AGENCY TO THE SEAL
BEACH AGENCY Attest:
0
Executive Director Secretary
CITY OF SEAL BEACH
By:
Mayor
SEAL BEACH SHORES, INC.,
a California nonprofit public benefit
corporation
By:
[Title]
By:
[Title]
CIVICSTONE, INC.
a California corporation
By:
[Title]
By:
[Title]
Attest:
City Clerk
-5-
12805- 0005V1989566v6.do
EXHIBIT A
Consent of ACA to Appointment of Successor Oversight Agent
12805- 0005V1989566v6.doc
EXHIBIT B
Administration Fee as of [October] 2016
The Indenture provides: "Administration Fee" means an amount equal to $500 per month such
amount to be increased annually on December 15, commencing December 15, 2001, to reflect
90% of any increase in the Consumer Price Index All Urban Consumers for the California
CMSA in which the Redevelopment Agency of the City of Seal Beach is located (base year
1982 -1984 = 100), published by the United States Department of Labor, Bureau of Labor
Statistics ( "BLS "). If the base is changed, the CPI used shall be converted according to the
conversion factor provided by the BLS.
* Data per U.S. Department of labor, Bureau of labor Statistics. website (ham: / /data.bls. Qov1cxi- bin1sur evrwst7cul, as of
August 23, 2016.
.l No change from prior year because of decrease in CPI.
12805- 0005 %1989566v6.doc
Annual
CPI -All Urban
Administration Fee
((90% x CPI Increase
Administration Fee
Administration
Base
Consumers (LA-
CPI
by % x Annual
per Quarter
Fee per Month
Date /Adjustm
Base
Increase
Administration Fee
(Annual
(Annual
ent Date
Area)
Area) (Base
by %
for Prior Year) +
Administration Fee
Administration
Period 1982-
Annual
+4)
Fee- 12)
K4 =100)•
Administration Fee
for Prior Year)
12/15/2000
171.600
$6,000.00
$1,500.00
$500.00
12/15/2001
177.300
3.32%
$6,179.37
$1,544.84
$514.95
12/15/2002
182.200
2.76%
$6,333.07
$1,583.27
$527.76
12/15/2003
187.000
2.63%
$6,483.23
$1,620.81
$540.27
12/15/2004
193.200
3.32%
$6,676.69
$1,669.17
$556.39
12/15/2005
201.800
4.45%
$6,944.17
$1,736.04
$578.68
12/15/2006
210.400
4.26%
$7,210.51
$1,802.63
$600.88
12/15/2007
217.338
3.30%
$7.424.50
$1,856.13
$618.71
12/15/2008
225.008
3.53%
$7.660.32
$1,915.08
$638.36
12/15/2009
223.219
- 0.80%
$7,660.321
$1,915.08
$638.36
12/15/2010
225.894
1.20010
$7.742.94
$1,935.73
$645.24
12/15/2011
231.928
2.67%
$7,929.08
$1,982.27
$660.76
12/15/2012
236.648
2.04%
$8,074.31
$2,018.58
$672.86
12/15/2013
239.207
1.08%
$8,152.89
$2,038.22
$679.41
12/15/2014
242.434
1.35%
$8,251.88
$2,062.97
$687.66
12/15/2015
244.632
0.91%
$8.319.21
$2.079.80
$693.27
* Data per U.S. Department of labor, Bureau of labor Statistics. website (ham: / /data.bls. Qov1cxi- bin1sur evrwst7cul, as of
August 23, 2016.
.l No change from prior year because of decrease in CPI.
12805- 0005 %1989566v6.doc
Resolution Number OB16 -03
may deem necessary or advisable to effectuate this Resolution and the Oversight Agent
Agreement, as amended by Amendment No. 1 to Oversight Agent Agreement.
PASSED, APPROVED AND ADOPTED by the Oversight Board at a meeting
held on the 17 day of November 2016.
AYES: Board Members:
NOES: Board Members:
ABSENT: Board Members:
Chair, Oversight Board
ATTEST:
Secretary, Oversight Board
Exhibit A
SCOPE OF SERVICES & FEE SCHEDULE
Seal Beach Mobile Home Park Revenue Bond
Program Administration & Oversight Agent
Summary
CivicStone will act as Program Administrator and Oversight Agent for the Regulatory
Agreement and Declaration of Restrictive Covenants, dated as of December 1, 2000.
CivicStone will verify compliance of Seal Beach Shores of the statutes and obligations as
outlined in the Regulatory Agreement. In addition, CivicStone will monitor the income levels of
the residents of the Qualified Spaces and carry out the duties of the Oversight Agent as set forth
in the Loan Agreement.
Scope Of Work
• Review the Income Certifications, Certificates of Continuing Program Compliance and all other
certificates for the Regulatory Agreement and the Agency Regulatory Agreement in order to
determine that each document is complete. CivicStone will receive these documents from
Seal Beach Shores. CivicStone will also verify the internal accuracy of the calculations and
conclusions as well as confirm that the Qualified Spaces have been rented as specified by the
terms of the Regulatory Agreement. CivicStone will further verify that the occupancy
requirements have been met.
• Stay familiar with and notify all parties of changes in HUD income levels as well as maximum
allowable rents as indicated in the Regulatory Agreement
• Establish a Database to process and historically record all Qualified Spaces and provide the
needed reports to the City as well as all appropriate parties in the Regulatory Agreement.
• Review the leases for the Qualified Spaces to verify compliance on an annual basis.
CivicStone will receive these leases from Seal Beach Shores. Notify findings to appropriate
parties as required by the Regulatory Agreement.
• Prepare and file annual reports as required by Section 8855.5 of the Government
Code of the State of California [California Debt Advisory Commission and the
Treasurer]
• Annually review the financial statements of Seal Beach Shores and provide any
recommended actions.
• Coordinate a quarterly physical inspection of the infrastructure, clubhouse and
common areas of the Project and report needed improvements.
12598 Central Ave, Suite 102, Chino, CA 91710 Phone: 909 - 885 -0229 Fax: 909 -885 -0649
Y w .civicstone.conn
• Prepare and disseminate a monthly confirmation report of deposits.
• Review and approve requests from Seal Beach Shores to withdraw funds from the Rental
Assistance Fund.
• Prepare and submit annual reports of all withdrawals from the Rental Assistance Fund,
Resident Services Fund and the Agency Loan Fund.
Maintain comprehensive files on all Qualified Spaces from the date of this contract forward.
Fee Schedule
CivicStone will bill the City of Seal Beach on a monthly basis based upon an hourly fee
scheduled indicated below, plus reimbursable expenses not to exceed $28,000 per year. The
billing rates are as follows:
Adam Eliason CEO: $120 per hour
Monique Eliason Project Coordinator: $95 per hour
Administration Specialist: $50 per hour
Program Compliance
Summary
Upon careful analysis of the Regulatory Agreement and Declaration of Restrictive Covenants,
the Amendment of Regulatory Agreement, the Seal Beach Shores Subsidy Application Packet,
the Seal Beach Shores Annual Housing Affordability Survey, the Administration and Oversight
Agreement as well as the results of the Administrative Audit as performed by JWA Urban
Consultants in November 2015; CivicStone has found a number of program non - compliance
issues that need to be addressed, documented and resolved. Each discovered area of non-
compliance is briefly described below, as well as CivicStone's recommended resolution. Once
each issue is resolved to the City's satisfaction, only the maintenance from the Program
Administrator and Oversight Agent will be required annually; as Program Compliance will be
complete.
Fee Schedule
An estimation of hours required to resolve the non - compliant areas is listed for budgetary
purposes in each section. However, often non - compliant issues are easy to diagnose, but the
depth and breadth of the underlying problems and needed actions to resolve those problems
are unknown until work commences and uncovers the ease or complexity. Consequently,
CivicStone's recommended actions in these areas will be billed on an hourly basis with frequent
reviews by the City of Seal Beach, without a not -to- exceed contract amount. Budgeted amounts
are estimated based upon information known at this time and anticipated work required. Any
additions to the scope and amount will be mutually agreed upon by CivicStone and the City of
Seal Beach. The billing rates are as follows:
12598 Central Ave, Suite 102, Chino, CA 91710 Phone: 909.885 -0229 Fax: 909- 885 -0649
www.civicstonexom
Adam Eliason CEO: $120 per hour
Monique Eliason Project Coordinator: $95 per hour
Administration Specialist: $50 per hour
File Repair
Issue: As mentioned by JWA, "most files do not contain the full set of information and
documents; many are missing the initial applications, tax returns at time of initial application,
calculation of low /mod determination and rent affordability" needed to document program
compliance.
Action: CivicStone will develop a file log to be used for each qualifying resident. CivicStone
will compile documentation from Seal Beach Shores Park office, the Fullerton main office, J &H
Asset Property Mgmt., RSG, The Lofting Firm as well as contact individual residents to
complete and maintain the master files. Where documents are missing or unavailable, current
compliance documents will be included to verify eligibility. For example, if self- certification of
income is the only source of income eligibility, CivicStone will acquire back -up documents to
properly verify income. If there are missing tax returns because the resident doesn't file due to
income; a Declaration Of Exemption for filing taxes will be included in the log's section for tax
returns. Notations will be made in each section for ease of analysis as well as provide a
comprehensive applicant history.
Estimated Budget: $7,750
Problematic Forms
Issue: The existing Exhibit `B" Income Computation and Certification form is used to verify
income and determine percent Median Income for program compliance. However, the existing
form requires no back -up documentation nor substantiated proof of income. Consequently, the
resident self- certifies income. This is problematic, and will not be adequate proof of income in
an audit.
Action: CivicStone will revise this form to help the applicant accurately identify all sources of
income, as well as list acceptable and required back -up documentation for proper income
verification.
Estimated Budget: $250
Issue: As noted by JWA, the existing Occupancy Agreement as well as the Subscription
Agreement both issued by Seal Beach Shores, do not adequately identify the requirements of
the resident with the Regulatory Agreement; specifically in regards to the affordability
requirements. Furthermore, the Occupancy Agreement also allows the subleasing of the
Member's Space, which is a direct violation of the Regulatory Agreement.
12598 Central Ave, Suite 102, Chino, CA 91710 Phone: 909 -885 -0229 Fax: 909 - 885 -0649
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Action: CivicStone will work closely with Seal Beach Shores and appropriate legal counsel to
fix these Agreements and replace the existing Agreements with corrected ones; or have
Addenda created to remove the Regulatory Agreement conflicts. It is anticipated that Seal
Beach Shores will get the updated Agreements and /or Addenda signed by the residents.
Estimated Budget: $1,425
Issue: According to the Regulatory Agreement, the resident leases should have a provision
that mandates that any misrepresentation of income or failure to cooperate with the annual
certification will disqualify the Space as a Qualified Space and provide grounds for termination
of the lease. The existing leases do not have this provision.
Action: CivicStone will work with the legal department to fix these leases and replace the
existing leases with corrected ones or have an Addendum created to the same effect. It is
anticipated that Seal Beach Shores will get the Addendum signed by the residents.
Estimated Budget: $675
RAMP -UP Funds
Issue: Residents at Seal Beach Shores Mobile Home Park that have long -term leases prior to
November 2000 all receive rental assistance in the form of Ramp -Up funds. Upon investigation
by JWA Urban Consultants November 2015 Administrative Audit, it is unclear why these
payments are made or the source of the funds to make these payments. Some account is
being drained of money without proper oversight. Conjecture is that there may have been a
"buy -in" when the initial Regulatory Agreement was made, but no documentation has been
found.
Action: CivicStone will investigate the source of the funds as well as the purpose for the
distribution. CivicStone will begin with inquiries at RSG and if needed trace the assistance
checks through the bank. By following the trail of money, CivicStone hopes to locate the source
of funds, the account used for funding, as well as the purpose for the expenditures. Once this is
determined, CivicStone will discuss its findings with the City of Seal Beach and determine the
next plan of action. Possible actions resulting from this investigation could result in: drafting a
staff report to advise council and recommending approval to move forward with existing funding
as well as creating a report of program summary for the City of Seal Beach.
Estimated Budget: $2,800
Policy & Procedures Manual
Issue: Likely the Bond Regulatory Agreement was properly managed by the Redevelopment
Agency of The City of Seal Beach. However, when the Redevelopment Agency was closed,
some of the compliance monitoring and history was lost.
12598 Central Ave, Suite 102, Chino, CA 91710 Phone: 909.885 -0229 Fax: 909 - 885-0649
vimi.civicstone.corn -__
Action: CivicStone will create an extensive Policy & Procedures Manual that will identify the
specific duties and responsibilities of each entity involved in this Regulatory Agreement; the
milestones and deadlines; action items; provide check lists and applicable forms and Exhibits.
This Policy & Procedures Manual will be a valuable tool for the Issuer, the Trustee, the
Borrower, the Program Administrator as well as the Oversight Agent. It will be written so that a
change in personnel at any level will not jeopardize the proper management of the Regulatory
Agreement and Declaration of Restrictive Covenants.
Estimated Budget: $9,600
12598 Central Ave, Suite 102, Chino, CA 91710 Phone: 909 - 885 -0229 Fax: 909 - 885 -0649
vimi.civicstone.com