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CITY OF FOSTER CITY
CONTRACT AMENDMENT NO. TWO (2)
PROFESSIONAL SERVICES AGREEMENT
FOR PROPERTY MANAGEMENT AND LEASING
FOR EXISTING UNIT PURCHASE PROGRAM
DATE: November 18, 2024
ACCOUNT NUMBERS: 122-0832-463-42-81, 122-0832-463-42-84, AND 122-0832-463-42-8187
PROJECT NAME EXISTING UNIT PURCHASE PROGRAM HOMES
TO: HIP HOUSING AFFORDABLE VENTURES
CHANGE REQUESTED BY CITY OF FOSTER CITY AND HIP HOUSING AFFORDABLE VENTURES, INC.
Based on mutual agreement, HIP Housing Affordable Ventures, Inc. and the City of Foster City agree to amend the original Agreement dated February 24, 2021 (“Agreement”) and Amendment No. 1, dated March 18, 2024, which are identified as follows:
ORIGINAL AGREEMENT AMOUNT: $45,000.00
AMENDMENT NO. 1 AMOUNT $122,660.00
AMOUNT EXPENDED TO DATE: $14,743.99
REVISED AMOUNT OF AGREEMENT WITH
AMENDMENT NO. 1 FOR EMERGENCY REPAIRS $167,660.00
AMOUNT OF AMENDMENT NO. TWO (2): ($109,600.00)
REVISED TOTAL AMOUNT OF AGREEMENT: $58,000 per fiscal year
The decreased maximum is needed due to the near completion of the emergency repair work for 833 and 835 Comet Drive for which Amendment No. 1 was approved and the original Agreement amount of $45,000 is not sufficient for the revised scope of work. The maximum amount of funds allocated to be paid to HIP Housing Affordable Ventures per fiscal year is $58,000.
The parties agree that the Agreement shall be amended as set forth herein. 2 8
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AMENDMENT
The parties agree that the Agreement shall be amended as set forth herein.
1. Section C.1, Services in the Agreement shall be amended to change all references from Exhibit A-1 to Exhibit A-2.
2. Section C.2(a), Term; Termination in the Agreement shall be replaced in its entirety to read as follows:
“(a) The term of this Agreement shall commence upon the date hereinabove written and shall terminate two years from the date of this Agreement, unless the term is extended by either party for an additional two years. Either party may exercise this option to extend the term by providing the other party with 90 days’ notice. If the other party does not agree to the renewal, then the term shall expire at the end of the term. ”
All other subsections of Section C.2 of the Agreement shall remain unchanged.
3. Section C.3. Compensation; Expenses; Payment of the Agreement shall be replaced in its entirety to read as follows:
“CITY shall compensate CONTRACTOR for all services performed by CONTRACTOR hereunder in an amount based upon CONTRACTOR’s hourly rates during the time of the performance of said services. A copy of CONTRACTOR’s hourly rates for which services hereunder shall be performed are set forth in CONTRACTOR’s fee schedule marked Exhibit “B-2” hereof, attached hereto and by this reference incorporated herein.
Notwithstanding the foregoing, the combined total compensation and reimbursement of costs payable hereunder shall not exceed the sum FIFTY-EIGHT THOUSAND DOLLARS ($58,000) per fiscal year. Invoices for amounts in excess fifty-eight thousand dollars ($58,000) shall not be paid unless the performance of services and/or reimbursement of costs and expenses in excess of said amounts have been approved in advance of performing such services or incurring such costs and expenses by the City Manager (for contracts less than $50,000) or City Council (for contracts $50,000 or more) evidenced by motion duly made and carried and a written contract amendment having been executed.
Invoices shall be remitted electronically for payment monthly for monthly fees and within sixty (60) days of service work performed and by July 15th of each year for work performed in June of any given fiscal year. Invoices must clearly indicate the date of service and receipts for purchased supplies and equipment must be attached.”
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4. Section C.15. Notice in the Agreement shall be replaced in its entirety to read as follows:
15. Notice. All notices required by this Agreement shall be given to the CITY and CONTRACTOR in writing, by first class mail, postage prepaid, addressed as follows:
CITY: City of Foster City
610 Foster City Boulevard
Foster City, CA 94404-2299
Attention: Sofia Mangalam, Community Development Director [email protected]
CONTRACTOR: HIP Housing Affordable Ventures
1512 Stafford Street
Redwood City, CA 94063
Attention: Thatiane Avila, Director of Property Management [email protected]
5. Section 22 of the Agreement is revised to read in its entirety as follows:
“This Agreement, including Exhibits A-2, B-2, C, E, and F-1, comprise the entire Agreement.”
6. Exhibit A of the Agreement shall be replaced in its entirety with Exhibit A-2, attached hereto and hereinafter incorporated by reference.
7. Exhibit B-1 of Amendment No. One (1) shall be replaced in its entirety with Exhibit B-2 attached hereto and hereinafter incorporated by reference.
8. Exhibits C and E remain unchanged. There is no Exhibit D in the Agreement.
9. Exhibit F of the Agreement shall be replaced in its entirety with Exhibit F-1, attached hereto and hereinafter incorporated by reference.
10.Except as specifically modified herein, all other terms and provisions in the Agreement shall remain unchanged.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. Two (2) to be executed on the date first above written by their respective officers duly authorized in that behalf.
CITY OF FOSTER CITY:
Dated: _________________________________ Patrick Sullivan, Mayor
ATTEST:
Dated: ________________________________ Priscilla Schaus, City Clerk
APPROVED AS TO FORM:
Dated:
Benjamin Stock, City Attorney
HIP HOUSING AFFORDABLE VENTURES
INC:
Dated:
Kate Comfort Harr, Executive Director
Attachments:
Exhibit A-2: Revised Scope of Work
Exhibit B-2: Revised Fee Schedule
Exhibit F-1: Revised Leasing Guidelines
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EXHIBIT A-2
SCOPE OF WORK AND SCHEDULE
FOR
EXISTING UNIT PURCHASE PROGRAM
Revised November 18, 2024
This Exhibit A-2 replaces Exhibit A-1 and the original Exhibit A of the Agreement between HIP Housing Affordable Ventures and the City of Foster City for the Existing Unit Purchase Properties listed in Exhibit E.
HIP Housing Affordable Ventures, Inc. (HHAV) will provide property management and initial and annual income and occupancy certification compliance services for the units.
1. Services to be Performed by Agent. Agent shall lease, operate, maintain, manage and repair the Properties. Attached as Exhibit E is a list of the Properties as of the date of this Agreement. Perform all usual and customary management functions to facilitate the efficient operation of the Properties for the purposes described in this Agreement. Agent shall perform these duties with due diligence. Without limiting the generality of the foregoing, Agent shall do all of the following:
A. Leasing. Agent shall advertise in the Foster City Islander and/or other media as determined in consultation with Owner when a vacancy occurs, manage a waitlist, select qualified tenants and lease the Properties in accordance with the Leasing Guidelines attached hereto as Exhibit F. The Leasing Guidelines may be changed from time to time by mutual agreement. Agent shall develop the forms of lease application and lease agreement to be used for the Properties, which forms shall be subject to the prior approval of Owner. Agent shall enter into the leases as agent on behalf of Owner. A copy of the lease application and fully-executed lease, along with the certification of income verification and household size on a Tenant Income Certification (TIC) form provided by Agent shall be sent to Owner within 15 days after execution of the lease. Agent shall maintain individual tenant files containing a copy of the lease, verification of income form, notices and all correspondence with the tenant. All tenant files shall be maintained a minimum of 5 years after the tenant has vacated the Property.
B. Collection of Rent. Agent shall ensure that all rents and any other moneys payable under the leases are paid by the tenants of the Properties in a timely manner. Agent shall require that rents and any other moneys payable under the leases are paid directly to the Owner. On the 6th day of each month Owner shall notify Agent and Agent's designated Property Management Company when rent has not been received. Notification may be by email, letter or fax as determined by the owner.
C. Enforcement of Leases. Agent shall secure full compliance by each tenant with the terms of its lease. Upon default by a tenant, Agent shall pursue legal remedies in accordance with applicable California law for recovery of the leased premises. For this purpose, Agent is authorized to sign and serve in the name of the Owner such notices as are appropriate, to institute and prosecute actions to evict tenants and to recover possession of the Property in the name of the Owner, to recover rents and other sums due and when expedient to settle, compromise and release such actions or suits or reinstate such tenancies. Agent shall keep Owner informed of such warnings and/or actions and shall follow any instructions of Owner as Owner may reasonably 2 8
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prescribe for the conduct of any such action. Agent may not pursue monetary damages against a tenant without the prior written consent of Owner.
D. Maintenance and Repair. Agent shall maintain the Properties in good condition and repair at all times. Agent shall quickly repair or cause to be repaired any item brought to its attention by Owner or a tenant or that is observed by the Agent. Agent shall perform site inspections at the end of the first month of tenancy and annually thereafter to ascertain the condition of the Properties. For this purpose, and as limited in this paragraph, Agent is authorized to make or cause to be made and supervise repairs, alterations, landscaping and decorating on the Properties. Agent may enter into service contracts with unaffiliated third parties for the performance of services hereunder, provided each contract shall be terminable by Owner upon 30 days written notice. Front yard landscaping shall be maintained by a landscaping firm hired by Agent. Any single expenditure in excess of $500, excluding labor for repairs and maintenance, or $10,000 for emergency repairs, shall require the prior written consent of Owner. Owner's prior consent shall not be necessary with respect to monthly or recurring operating charges and emergency repairs that are necessary, in the opinion of the Agent, to protect the Properties from damage, to prevent bodily harm or property damage, to avoid the suspension of services, to avoid penalties or fines and to maintain the services required under the lease to be provided to the tenant. Agent shall obtain three bids for any work which exceeds $10,000 and shall submit the bids to the Owner for approval. Agent shall work diligently to complete all repairs in a timely manner and in particular when a Property is vacant so the Property can be promptly leased to another tenant. Except under unusual circumstances, the Properties should be vacant no more than 30 days. Agent shall notify Owner whenever a Property will be vacant more than 30 days. Upon acquisition of a Property by Owner and upon the vacancy of a Property following the termination of a tenancy, Agent shall promptly inspect the Property and determine a course of action to perform all necessary repairs and improvements. Agent shall notify Owner of the course of action and unless Owner objects within 10 days from receipt of Agent's notice, Agent may proceed to perform the repairs and improvements. At the direction of the Owner, inspections, repairs and improvements may be performed by employees of the City of Foster City.
E. Taxes and Assessments. Taxes and assessments shall be paid directly by Owner and not by Agent. Agent shall promptly deliver to Owner notices relating to taxes and assessments received by Agent.
F. Employees. Agent shall hire, discharge and supervise all employees required for the operation and maintenance of the Properties. All employees performing work (other than the City employees specifically designated by Owner to perform inspection and repair work) shall be employees of Agent and not Owner. Agent shall comply with all applicable laws and regulations concerning worker's compensation, social security, unemployment insurance, hours of labor, wages, working conditions and all other rules and regulations governing employees.
G. Annual Budget. No later than March 1 of each year, Agent shall deliver to Owner a proposed budget for the following fiscal year (July 1 -June 30), for all major operating and other expenses including (i) repairs and maintenance of building components that in Agent’s estimation exceed $1,000; (ii) cleaning following the termination of a lease; (iii) landscaping; (iv) capital expenditures such as roof repairs and replacements; and (v) any other costs and expenses relating to the Properties. Owner shall accept or reject the proposed budget within 30 days after its receipt. If Owner rejects, 2 8
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Owner and Agent shall meet in good faith to resolve their differences. Once the budget is agreed upon, Agent shall perform its services in accordance with the budget. If additional properties are added, Agent shall modify the budget accordingly
2. Accounts.
A. Disbursements. Owner will make disbursements from the Operating Account to pay all expenses of the Properties which are the obligations of Owner and are authorized to be incurred by Agent under the terms of this Agreement, including Agent's Fees as described above in paragraph 4.
B. Security Deposits. Security deposits collected by Agent shall be submitted to Owner. Security deposits shaII be returned to tenants pursuant to the terms of the leases and in strict accordance with California law. Security deposits may be reimbursed to tenants via Agent.
3. Records. Agent shall establish and maintain a comprehensive system of, tenant and property records and work order log for the Properties separate and apart from any other properties Agent owns or manages. The work order log shall be submitted to Owner on the first of each month or upon request. All records shall be the property of Owner and shall be available for examination at reasonable hours by any authorized representative of Owner. For each expenditure, Agent shall have invoices submitted directly to the Owner for payment with the property address on each invoice.
4. Reports.
A. Monthly. At the end of the first month of a tenancy, Agent shall perform a site visit and inspection. Following the inspection, Agent shall send a written report of the inspection to the Owner.
B. Annually. On March 1 of each calendar year, Agent shall provide Owner with the following reports:
(i) A certification of the income of each current resident as of the date of the last income certification, the current rent charged each resident and the amount of any utilities included in the rent. Owner may specify the format for this report. (ii) An inspection report, including a list of any material physical defects in the Properties, including a description of any major repair or maintenance work to be performed in the following year.
(iii) A statement regarding the general management of the Properties, including information about tenant relations, communications from tenants, the physical condition of the Properties and any other information deemed relevant by Agent or requested by Owner.
(iv) A list of the expiration dates of each lease.
5. Fidelity Bond. Agent will furnish, at Agent's expense, a fidelity bond in the amount of $20,000, to protect the Owner against misapplication of funds from the Properties by Agent and its employees.
A Summary of Services is as follows:
1. Set-up
• Review of relevant ordinance and documents, including loan documents. • Customization of compliance forms, analytics, and reports. • Meetings and calls with the City and HHAV staff to discuss process, deliverables, schedule, duties, and reporting requirements, requests, analytics, and schedule. • Preparation of marketing plan and file preparation.
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2. Initial Lease-up and Filling of Vacancies
Marketing the property pursuant to criteria and protocols established by the City and as stated in the City’s BMR Rental Housing Program Procedures and Guidelines.
Showings of units to prospective applicants.
Managing lottery process and developing and managing a waitlist, except that the City of Foster City may manage the waitlist for city employees, including first responders, if applicable, and if mutually agreed to by both parties. Processing applications, collection of applications fees, and conducting credit and background checks.
New move-in certifications and notifications to the city of tenant status. Collection of deposit and initial rent.
Initial tenant income certifications.
Lease preparation and execution.
File management.
Filling vacancies within a sixty (60) day period to the extent feasible.
3. Compliance, Annual Recertifications, and Reporting
• Annual recertification of household occupancy and tenant income per BMR Rental Housing Program Procedures and Guidelines.
• Preparation of analytics and reports and presentation and/or submittal of report to the City of Foster City.
4. Property Management
Duties shall be managed by CONSULTANT’S Director of Property Management and shall include:
• Lease management and enforcement.
• Managing reasonable accommodation requests.
• Tenant relations.
• Compliance with the City’s BMR Rental Housing Procedures and Guidelines as they pertain to property management.
• Monitoring rent and utility payments, if applicable.
• Rent payment notices as needed.
• Management of third-party utility billing vendor, if applicable, and noticing tenants as required.
• Posting notices to tenants as needed.
• Responding to and processing tenant work order requests for repairs and maintenance.
• Submitting HHAV and third-party invoices to City for processing in a timely manner as stated in the Agreement.
• Attending meetings with City staff and City-hosted below market rate (BMR) Guidelines training and quarterly property manager meetings. • Annual unit inspections in coordination with City Building Division. 2 8
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• Common area management, including maintenance and repairs and contracts with third parties for landscaping, pest control, backflow testing, fire alarm testing, parking management, and other work needed for building operations. • Move-outs, including inspections and management of refund of security deposit deductions for repairs due to damages; and refund of security deposit to Tenant per California Civil Code Section 1950.5.
• File management.
5. Project Management
CONSULTANT will provide project management services for any major repairs or construction/rehabilitation projects to the property’s exterior buildings, grounds, or interiors that total $10,000 or more, including items under warranty. Services for each project include:
a. Determining scope of work in accordance with city requirements b. Bidding the projects to appropriate vendors pursuant to city requirements c. Managing project team and vendors
d. Managing invoices and coordinating payments
e. Coordination with the City regarding inspections and completion of work
6. Administration
CONSULTANT shall conduct the following tasks.
Provide an annual rate sheet for services to CITY for the next fiscal year (July 1 to June 30) no later than March 1 of each year.
Provide an estimated budget of operating expenses for the next fiscal year to CITY by March 1 of each year.
Submit annual inspection reports by March 1 of each year using a method as specified in the City’s BMR Guidelines.
Submit annual report by January 31 of each year.
Attend meetings with the City as needed.
Attend Below Market Rate property training sessions hosted by the City for BMR property managers.
Providing files or other documents to the City for annual audits or review upon request.
Submit annual maximum rent, income limits, and utility allowance calculations to the City each year within thirty (30) days of issuance of income limits by HCD and the annual Utility Allowance Schedule by the County of San Mateo. Submit invoices and receipts for work performed or supplies or equipment purchased within sixty (60) days of the date of service for services provided July 1 through May 31 of each year and by July 15 for all services performed June 1 to June 30 of each year. All invoices must clearly indicate the date of service and receipts must be attached. Invoices shall be submitted electronically to the City’s email address for invoices set up for this project or another method as determined by the City.
7. Other Duties
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Other duties from time to time as required and/or mutually agreed to in order to effectively manage the property in compliance with regulatory requirements, new legislation, and/or local policies and best practices.
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EXHIBIT B-2
CONSULTANT’S FEE SCHEDULE
FOR
PROPERTY MANAGEMENT FOR
EXISTING UNIT PURCHASE PROGRAM
Revised November 18, 2024
Agent's Fees. As compensation for Agent's services hereunder, Owner shall pay to Agent the Monthly fees for CONSULTANT as follows:
Management Fee Methodology Monthly Rate
Management and Accounting $230 per unit per
month
$1,380
Weekly janitorial service N/A $0
Weekly onsite property management N/A $0
Total $1,380
Additional Fees
Fee/Cost Rate/Notes
Move-in $1,000 per move-in.
Repairs, maintenance,
turnovers billed to City from
HIP Housing
$75 per hour for general maintenance and repairs.
$100 per hour for cabinetry, countertops, and
minor construction.
$125 per hour for plumbing and electrical.
Supplies and equipment billed with no markup.
Project Management 10% of total project cost for projects of $10,000 or more
CONSULTANT shall submit an annual rate sheet by March 1 of each year if fees or billing rates change.
The above amounts exclude any third-party payments to vendors for building operations, including, but not limited to utilities, landscape maintenance, pest control, fire alarm testing, backflow assembly testing, equipment, supplies, maintenance services, or repairs.
Liability account
In addition to expenses listed above, security deposits may be refunded via HIP Housing Affordable Ventures. The refund of security deposits to tenants is not classified as an expense.
For services which are not enumerated in this Agreement, Agent and Owner shall mutually agree upon any additional fee to be paid to Agent. Services which are not included in this Agreement include management and supervision services relating to fire restoration or major rehabilitation.
Contract Maximum
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The total amount of compensation to be paid under this contract shall not exceed the sum of $58,000 per fiscal year.
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Exhibit F-1
LEASE GUIDELINES
Updated November 18, 2024
1. Preferences.
The Preference priorities named below replace Community Development Department Minute Order No. 18 and Resolution No. 2020-24 with Resolution No.2023-3.
1. A non-profit supportive housing provider that will operate the unit for persons requiring supportive housing (as defined by FCMC Section 17.04.544).
2. Very low income tenants (as defined in California Health and Safety Code Section 50105) living and working in Foster City.
3. Low income tenants (as defined in California Health and Safety Code Section 50079.5) living and working in Foster City.
4. Very low income tenants (as defined in California Health and Safety Code Section 50105) living in Foster City.
5. Low income tenants (as defined in California Health and Safety Code Section 50079.5) living in Foster City.
6. Very low income tenants (as defined in California Health and Safety Code Section 50105) who are employees of the City of Foster City.
7. Low income tenants (as defined in California Health and Safety Code Section 50079.5) who are employees of the City of Foster City.
8. Very low income tenants (as defined in California Health and Safety Code Section 50105) who are classroom teachers employed by the San Mateo- Foster City School District, the San Mateo Union High School District or the San Mateo County Community College District.
9. Low income tenants (as defined in California Health and Safety Code Section 50079.5) who are classroom teachers employed by the San Mateo-Foster City School District, the San Mateo Union High School District or the San Mateo County Community College District.
10.Very low income tenants (as defined in California Health and Safety Code Section 50105) who work in Foster City.
11.Low income tenants (as defined in California Health and Safety Code Section 50079.5) who work in Foster City.
12.Very low income tenants (as defined by California Health and Safety Code Section 50105) – all others who are income qualified.
13.Low income tenants (as defined by California Health and Safety Code Section 50079.5) – all others who are income qualified
The Owner will issue a Request for Proposals and/or select a qualified proposal for Preference 1, if applicable.
2. Household Size. The program is designed for larger households. Minimum household size for two-bedroom units shall be three (3) people. Minimum household size for three-bedroom units shall be five (5) people. Minimum household size for 2 8
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five-bedroom units shall be six (6) people. Tenants not meeting this requirement must be approved by Owner.
3. Affordable Rent. Tenants will pay "affordable rent" as such term is defined in California Health and Safety Code Section 50053. Rents may be lower than maximum chargeable rent and shall be set by Owner. Rent increases shall be determined by Owner in accordance with Federal, State, and Local laws and regulations.
4. Verification of Income and Household Size. Agent shall verify the household size and income of each tenant and shall certify both annually. Upon renewal of each lease, but in any event no less frequently than once a year, Agent shall reverify household size and the income of each tenant and adjust the rental amount if necessary. Recertification shall be in accordance with the City’s BMR Procedures and Guidelines. If the household size or income level changes so tenant no longer qualifies for the occupancy of the Property, the lease may not be renewed.
5. Lease Terms. Initial lease terms shall be for 12 months. Renewals may be month-to- month.
6. Security Deposit. A security deposit in the amount of one month’s rent shall be obtained.
7. Notice of Vacant Units. Notice shall be sent to the Owner as soon as Agent knows a tenant will be vacating the Property.
8. Standard Lease Form. The standard lease form shall contain a detailed description of the types of activity which will be cause for immediate eviction (e.g., criminal activity, nonpayment of rent) or warnings (e.g., failure to maintain the Property, causing a nuisance in the neighborhood). Agent shall develop a standard procedure for notifying tenants of defaults under the lease. Leases shall be consistent with the City’s BMR Procedures and Guidelines and include all legally required attachments and addenda. Owner shall have the right to approve the Lease Form.
9. Consultant shall provide the City with a copy of the lease and any subsequent notices within 14 days of execution.