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HomeMy WebLinkAboutMINUTES - 12041990 - IO.1 . . t1.0. -1 TO: I ,BOARD OF SUPERVISORSs_--_L ?� _ Contra FROM: Costa INTERNAL OPERATIONS COMMITTEE County DATE: November 26, 1990 ��sTq counts cP SUBJECT: PROPOSED MINIMUM PUBLIC PURPOSE STANDARDS FOR PRIVATE NON-PROFIT AND GOVERNMENTAL BOND FINANCING OF MULTI-FAMILY PROJECTS SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. Endorse the Public Purpose Standards set forth in the attached report from the Deputy Director-Redevelopment Agency dated November 19, 1990, which are incorporated herein by reference as the policy of the Board of Supervisors in regard to Qualified 501 (c) ( 3) and Governmental Bond Financing of Multi-Family Housing Projects. 2. Endorse the attached Guidelines for Issuance of 501 (c) ( 3) and Governmental Bond Financing of Multi-Family Housing Projects. 3 . Request the Deputy Director-Redevelopment Agency to address the concerns raised by the Housing Consultant for the Social Services Department in the attached memorandum dated November 26, 1990 in terms of the specific and unique needs of the Single Room Occupant, whether for a "hotel" type of residence for a single individual or for the more structured drug, alcohol or mental health rehabilitation facilities and return to the 1991 Internal Operations Committee with proposed guidelines for such facilities. 4. Remove this item as a referral to our Committee, leaving on referral to the 1991 Internal Operations Committee the standards for Single Room Occupants, as noted in Recommendation # 3 above. S CONTINUED ON ATTACHMENT: Yes YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF.,BOA MMITT APPROVE OTHER SIGNATURE(S): SUNNE WRIGHT McPEA TOM POWERS ACTION OF BOARD ON December 4, 1990 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator ATTESTED ouz_ ZLA_/ 4e /990 Community Development Director PHIL BATCHELOR,CLERK OF THE BOARD OF Redevelopment Director SUPERVISORS AND COUNTY ADMINISTRATOR Social Services Director Housing Authority County Counsel M382 (10/88) BY DEPUTY BACKGROUND On May 22, 1990, on the recommendation of our Committee, the Board of Supervisors agreed to consider financing multi-family projects owned by qualified 501 (c) ( 3) Non-profit �Organizations or by governmental entities and Governmental. Bond Financing of Multi-Family projects. The Board of Supervisors directed that proposed Minimum Public Purpose Standards be developed and reviewed by our Committee. On November 26, 1990 our Committee received the attached report from Jim Kennedy and reviewed it with him and Perfecto Villarreal, Executive Director of the Contra Costa Housing Authority. We believe that the Public Purpose Standards are appropriate for the reasons indicated in Mr. Kennedy's report and that the Guidelines for Issuance of Bonds are likewise appropriate. We are, therefore, recommending that both the Public Purpose Standards and the Guidelines be endorsed by the Board of Supervisors. We received a memorandum from Barbara McCullough, Housing Consultant for the Social Services Department, indicating her concern that these standards and guidelines do not include the possibility of using this funding mechanism for facilities for single individuals in a hotel or rehabilitation facility type of environment. We are, therefore, asking that standards for these types of facilities be developed and forwarded to the 1991 Internal Operations Committee for their consideration. N . r , . .. / | � CONTRA COSTA 'COUNTY REDEVELOPMENT AGENCY � | DATE: November 18. 198O TO: Internal Operations FROM: SUBJECT: Propo e imum Public Purpose Standards for Qualified 501(c)(3) and Governmental Bond Financing of Multi-FamilyHousing Projects' On May 23, 1990 the Board, upon recommendation of the |ntemmm| Operations Conmnnittee, agreed to consider financing multi-family projects Ovxnad by Qualified 501(c)(3) Non-profit Organizations or by governmental entities and Governmental Bond Financing of Multi-Family projects. In their action the Board requested that proposed Minimum Public Purpose Standards bedeveloped and reviewed bythe Internal Operations Committee. These proposed standards have been reviewed by the County Housing Authority Director, and The Social Services Director and their comments are incorporated. The proposed Minimum Purpose Standards and Guidelines for Issuance have also been reviewed by the County's Debi Review Committee (which includes the Auditor-Controller, Treasurer-Tax Collector, Deputy County Administrator-Capital Projects, and the Deputy Director-Redevelopment). Members of the committee expressed concern regarding the County or its designee having the right of first refusal to purchase developments financed by the County' noting that the County is not ' generally in the business of owning and managing multi-family properties. This conmnnentis noted. However, staff is recommending that the right of first refusal by the County or its designee be maintained because this could be an important element of a program to maintain affordable units for the long term. Attachment 1 1mthis memo provides additional detail. {n addition, a �t of interested Aon-profit developers for such multi-family projects was to be developed. 1' PUBLIC PURPOSE STANDARDS ' A aurnnnery of the proposed public purpose standards are listed below. The proposed standards are inAppendix ^4' Summary ofProposed Public Purpose Standards � Affordability: 1) Family Projects a) Minimum 20% of units for Very Low Income Tenants. b) Maximum 40% of units for Very Low, or Low Income Tenants. 2) Senior Citizen Projects (a) Minimum 20% ofunits for Very Low Income Tenants. (b) Up to 10096 of units for Very Low, Low or Moderate Income tenants. f • Term of Affordability: Minimum 30 years, could be longer. • Rent Levels (Monthly, expressed @ today's rates, not including utility allowance): Bedroom Size Studio 1 bdrm 2bdrm 1) Very Low Income Units $386 $441 $496 2) Low Income Units 507 616 721 3) Moderate Income Unit 507 616 721 • Affordable units indistinguishable from and comparable to market rate units. • Consistent application of tenant selection criteria for all units; none of said criteria can preclude lower income occupancy. • Non-discrimination requirements. • County to approve sale; County or designee have first right to match purchase offer. • County monitors compliance and is compensated. II. GUIDELINES FOR ISSUANCE A summary of proposed Guidelines for the Issuance of Qualified 501(c)(3) and Governmental Bonds are summarized below. The full quidelines are included in Appendix B. Summary of Issuance Guidelines. • Indemnification for the County. • Issues to generally be credit enhanced to permit issuance of investment grade rated bonds. • Any proposal for unrated or unenhanced bonds must meet specified requirements. • Developer party obligated to pay costs of issuance & annual fees, including County's. • A list of seven non-profit developers that have expressed interest in Qualified 501(c)(3), tax exempt financing is attached as Appendix C. This list is not necessarily exhaustive of all prospective non-profit developers. Ill. INTERESTED NON-PROFIT DEVELOPERS A list of seven non-profit developers who have expressed interest in Qualified 501(c)(3) tax exempt financing is attached as Appendix C. This list is not exhaustive of all prospective non-profit developers. s RA9/jb/501 C3.mem ATTACHMENT 1 CONTRA COSTA COUNTY COMMUNITY DEVELOPMENT DEPARTMENT DATE: November 7, 1990 TO: De Bell, Dep,uty �ounty Administrator FROM: Jim Kennedy-,) Deputy Director-Redevelopment SUBJECT: Qualified 501(c) (3) Bonds -- ---------- I appreciate your comments on the proposed Public Purpose Standards for the issuance of the above referenced type of bonds. Your comment is well taken. Clearly the County is not in a position where it can efficiently own and manage Multi-Family Residential Properties. The provision for the County to have the right of first refusal to purchase the properties at fair market value contains a stipulation that we may designate a third party to purchase on the County's behalf. It is intended that the County would generally arrange for a third party to step in the County shoes and exercise the right to purchase. ,J The policy derivation of this particular provision comes from the housing preservation area. As you may know, many Multi-Family projects that have been provided federal subsidies are beginning to reach a point in time where their affordability restrictions are terminating. The Board and many low income housing advocacy groups are quite concerned about this potential loss of low and moderate income housing stock, and have requested both the Federal and State Government to step in and prevent the loss of as many of these units as possible. one of the mechanisms by which that is being accomplished is to provide for the purchase of these properties by parties that would maintain at least some level of affordability ordability within the projects. At the local level projects that �have been financed by the County through Multi-Family Mortgage Bonds and other supplementary financing will similarly have expiration of their regulatory periods. We will have similar dilemmas in terms of those affordability units being lost, which we would, like to preserve. - By providing for the County to be able to step in (or more correctly a third party designee) to maintain the affordability, we may be one step ahead of o'er most local issuers in preventing the conversion of affordable units to market rate units. APPENDIX A Public Purpose Standards - Qualified 501(c)(3) & Governmental Multi-Family Bonds Qualified 501(c)(3) and Governmental Bond Financings of Multi-Family projects shall be governed by the Public Purpose Standards listed below. The following definitions apply with respect to these standards. I. Definitions 1. Qualified Project Period means the period beginning on the first day in which :? at least 10% of the dwelling units in the project are first occupied and ending on the latest of (a) the date which is 30 years after the date on which at least 50% (fifty percent) of the dwelling units in the project are first occupied, (b) the first date on which no tax-exempt bonds issued with respect to the project are outstanding, or (c) the date on which any assistance provided with respect to the project under any federal, state or local subsidy program terminates. 2: Very Low Income tenant means any tenant whose adjusted income does not exceed limits determined in a manner consistent with the Section 8 Rent Subsidy Program except that the percentage of median gross income that qualifies as Very Low Income shall be fifty percent (50%) of median gross income for the Oakland PMSA with adjustments for family size. If all of the occupants of a unit are students (as defined in Section 151(e)(4), of the Internal Revenue Code), such occupants shall not qualify as Very Low Income tenants. Determination of a tenant status as a Very Low Income tenant shall be made by the owner upon initial occupancy of a unit, and annually thereafter on the basis of an income certification executed by the tenant. 3. Low Income tenant means any tenant whose adjusted income does not exceed limits determined in a manner consistent with the Section 8 Rent Subsidy Program except that the percentage of median gross income that qualifies as Low Income shall be eighty percent (80%) of median gross income for the Oakland PMSA with adjustments for family size. If all of the occupants of a unit are students, (as defined in Section 151(e)(4) of the Internal Revenue Code), such occupants shall not qualify as Low Income tenants. Determination of a tenant status as a Low Income tenant shall be made by the owner upon initial occupancy of a unit, and annually thereafter on the basis of an income certification executed by the tenant. 4. Moderate Income tenant means any tenant whose adjusted income does not exceedlimits determined in a manner consistent with the Section 8 Rent Subsidy Program except that the percentage of median gross income that qualifies as moderate low income shall be one hundred twenty percent (120%) of median gross income for the Oakland PMSA with adjustments for family size. If all of the occupants of a unit are students, (as defined in Section 151(e)(4) of the Internal Revenue Code), such occupants shall not qualify as Moderate Income tenants. Determination of a tenant status as a Moderate Income tenant shall be made by the owner upon initial occupancy of a unit, and annually thereafter on the basis of an income certification executed by the tenant. A-1 5. Affordable Rent Shall Mean: A. For Very Low Income Tenants affordable rents shall not exceed an amount derived by multiplying thirty percent (30%) times fifty percent (50%) of the median gross income adjusted for family size determined pursuant to Section 8, net of a utility allowance, for a family of one person, in the case of a studio unit, two persons in the case.of a one bedroom unit, three persons in the case of a two bedroom unit, four persons in the case of a three bedroom unit, and five persons in the case of a four bedroom unit, etc. B. For Low Income units the rents shall not exceed the lesser of the }" following: 1. An amount derived by multiplying thirty percent (30%1 times eighty percent (80%) of the median gross income adjusted for assumed family size determined pursuant to Section 8, net of a utility allowance, for a family of one person in the case of a studio unit, two persons in the case of a one bedroom unit,'three. persons in the case of a two bedroom unit, four persons in the case of a three bedroom unit and five persons in the case of a four bedroom unit, etc.; or 2. The market rent for such units; or 3. The Section 8 fair market rent. C. For Moderate Income units the rents shall not exceed.the lesser of the following: 1. An amount derived by multiplying thirty percent (30%) times one hundred percent(100%) of the median gross income adjusted for assumed family size determined pursuant to Section 8, net of a utility allowance, for a family of one person in the case of a studio unit, two persons in the case of a one bedroom unit, three persons in the case of a two bedroom unit, four persons in the case of a three bedroom unit, and five persons in the case of a four bedroom unit, etc.; or 2. The market rent for such units; or 3. The Section 8 fair market rent. A-2 11. Public Purpose Standards 1 Lower income units shall be intermingled with all other dwelling units in the project and shall be of a quality and offer a range of sizes and number of bedrooms, and locations comparable to those units which are available to other tenants. Tenants in such units will have equal access to enjoyment of all common facilities in the project. No tenant qualifying for such unit shall be denied continued occupancy of a unit in the project if after admission such tenants adjusted income increases to exceed the qualifying limit, however should a tenants adjusted income, upon recertification, exceed one hundred forty percent (140%) of the applicable income limit for a tenant of the same family size,the next available unit of comparable or smaller size must be rented to a qualified Very Low, Low or Moderate Income tenant. 2. The owner will obtain complete and maintain on file income certifications from each Very Low, Low or Moderate Income tenant, and submit such information as the County may require. 3. The selection criteria for Very Low, Low and Moderate Income tenants shall not be more burdensome than the criteria applied to all other prospective tenants. 4. All tenant lists, applications and waiting lists relating to the project shall at all times be kept separate and identifiable from any other business of the owner and shall be maintained as required by the County in a reasonable condition for proper audit and subject to examination during business hours by representatives of the County. 5. The owner shall not discriminate on the basis of race, creed, color, religion, sex, sexual orientation, marital status, national origin, source of income, e.g., AFDC and SSI; ancestry or handicappe'd in the lease use or occupancy of the project or in connection with the employment or application for employment of persons for the construction, operation or management of the project. 6. The owner shall permit occupancy consistent with standards established by the State Department of Fair Employment Housing, which standards allow two persons per bedroom plus one person for the entire unit. 7. Should the owner have a significant number of on-site employees, the owner shall enter into a non-financial employment plan agreement with the County in which the owner agrees to utilize the County's Private Industry Council as its initial resource for recruitment, referral and placement for employment positions in the project. 8. The owner will list their property on the Housing Authority's Section 8 rental referral listing, and will accept as tenants on the same basis as all other prospective tenants, persons who are recipient of federal certificates for rent subsidies pursuant to the existing program under Section 8 of the Housing Act or its successor. A-3 . . ^. -~ . ° ` g' The owner shall not apply urcommit application Management Policies Lease Provisions with respect tothe project Yvhiohhavethoeffexz of precluding occupancy ofunits b« prospective Very Low, Low mrModerate Income tenants. 10' The owner shall pay or make provision for payment tothe County of Cost of Issuance, and annual Administrative Fees for the Qualified Project Pmrimdinen amount equal to 1/8thnf1q6ofthe original principal amount ofbonds issued. 11 . For the Qualified Project Period the owner shall not sell, transfer or otherwise dispose of the project without the prior written consent of the County. 12. The owner shall provide the County orits designee the right tomatch any offer topurchase the pr 'actd1uringthaC}ua|ifiedPr 'eotPerimduponthesarnetermna and conditions aathe proposed sale. 13' Projects for families shall be mixed income projects which include a minimum of twenty percent (20%) Affordable Rents/Very Low Income tenants and a maximum of forty percent (40%) Affordable Rents Very Low or Low Income tenants for the Qualified Project Period. 14. Senior citizen projects may be mixed income projects with a minimum o . 2096 of the total units at Affordable Rents/Very Low Income tenants for the Qualified Project Period. Uptoone hundred (10096) in o Senior Citizen Project' may be at Affordable rents to Very Low, Low, or Moderate income tenants. 15. The County in its sole discretion may waive any ofthe above requirements. Whi!a '' � Jhe goal of the County to facilitate the production or preservation of ai,;ordab|e housing, the County recognizes that from time to time, the fundamental aoPnVrnioS of the development, or the realization of other goals may bmmfprecedence. Such goals may include, but not limited torealization of redevelopment plan goals, or neighborhood preservation goals. ' ' RA1/jb/501C3'rnarn A4 i APPENDIX B CONTRA -COSTA- COUNTY GUIDELINES FOR ISSUANCE OF MULTI-FAMILY BONDS FOR QUALIFIED 501(C) (3) NONPROFIT ORGANIZATIONS I. PROPOSALS Before the County will consider any proposal or have any substantive meeting or discussion, the Participant (entity submitting the proposal) must provide: A. a clear written description of the proposal including cost estimates and any feasibility or other studies which have been prepared on the project for or by the Participant; B. a description of the proposed financing, including a proposed timetable, and a statement indicating. which of the categories of Bond Issues described in Section III below is being proposed; C. a clear written explanation of how it will comply with the relevant guidelines and any guidelines it will not meet and why they are not proposed to be met; D. a clear written explanation of any efforts to obtain credit enhancement and the problems encountered, if any; E. a completed project Information Form, in Form provided by the County; F. any other material requested. Proposals fulfilling the above requirements will be deemed to be properly submitted. The Deputy Director - Redevelopment acting as staff to the Board, will review submitted proposals for completeness on behalf of the County and submit them to the Board for approval, subject to and in accordance with these guidelines. II . GENERAL REQUIREMENTS A. Any and all projects to be financed by the County must be approved by the Board of Supervisors. B - 1 ' h B. Participants will be required to provide evidence of insurance as set forth by County Counsel or bond counsel. Insurance requirements may include but are not limited to: 1) comprehensive liability insurance; 2) casualty insurance; 3) title insurance; 4) rental interruption insurance, unless not economically feasible; 5) earthquake insurance, unless not economically feasible; and 6) insurance during construction which may include contractor's liability and property damage 'insurance, surety bonds, performance bonds and/or payment bonds. In specific cases, the County may require that the . Participant hire and pay the cost of a monitor of any construction. C. Each Participant will be required to provide indemnity to the County, its officers, agents and employees for all costs, expenses and attorneys' fees as well any judgement or settlement costs arising out of or involving the bond issuance or the underlying documents. D. In the case of bond issues in category III (C) below it shall be understood that. the County, if it agrees to act as issuer, is acting only as the issuer of the debt, and that the County and its officers have no legal or moral obligation, nor the intention to provide financial support to the project. E. Each Participant will be required to execute the County's Assurance Letter stating that it has read and understands the County's financing guidelines as set forth herein and therein. A form of said Assurance Letter is attached as Exhibit 1. F. All properly submitted proposals will be brought by staff to the Board of Supervisors to receive authorization for the County to act as Issuer. In the event a proposal is not properly submitted, or required supporting documentation is not made available, the proposal will not be brought to the Board by staff. G. In many cases, especially for bond issues in category (C) below, staff may require that a proposal be reviewed and evaluated by one or. more independent advisors to determine the appropriateness of the transaction for the County, the security of the transaction, the correctness of the proposed financing structure, the appropriateness of legal documents, etc. All fees and expenses of such advisors will be paid by the Participant whether or not the proposal is accepted by the County or the financing completed. B - 2 H. Underwriters/Investment Bankers, Bond Counsel, and Financial Advisors shall. be selected by the Board in accordance with selection procedures adopted on January 30, 1990, and attached to. as Exhibit 2. III. CATEGORIES OF BOND ISSUES: A. Credit Enhanced or Insured and Rated Subject to the guidelines stated above, staff will recommend issuance where: i) the bonds are credit -enhanced or insured for the term of the issue; and- ii) the bonds are rated investment grade or better by one or more nationally recognized bond rating agency. Issues which comply with either (i) or (ii) above, but not both, . will be evaluated on a case-by-case basis. County issuance fees are as follows: 1/8 of 1% ( . 00125) of par payable at closing; 1/8 of 1% ( . 00125) of original principal amount of bonds payable per annum for the Qualified Project Period, plus any additional fees and expenses incurred pursuant to General Requirements (G) and (H) above. B. Credit Enhanced But Not Rated In some cases there will be a normal credit enhancement but participants may want to avoid the cost or timing of obtaining a bond rating. The county will consider unrated financings which are enhanced or insured by institutions rated investment grade or better by Standard and Poors, Moody's, or other nationally recognized rating agency or rated "B" or better by Bank-watch. Those issuances which are credit enhanced but not rated will be evaluated on a case-by-case basis. County issuance fees are as follows: 1/8 of 1% ( . 00125) of par payable at closing; 1/8 of 1% ( .00125) of original principal amount of bonds payable per annum for the Qualified Project Period, plus any additional fees and expenses incurred pursuant to General Requirements (G) and (H) above. C. Other Unrated bonds The aim of the guidelines for this category, which includes most unrated bonds, is to help assure that the bonds are sold or resold based on project specifics, not the name of the County, that investors in these issues are competent to evaluate and accept the risks associated B 3 with these bond issues, that the financing will be as simple as possible both to issue and close and to administer and that the bonds will carry a level of risk that the County finds appropriate. All financings in this category will be evaluated on a case-by-case basis. Participants requesting such financings must include documentation of attempts to obtain credit enhancement and a detailed explanation of the decision to forego such enhancement. All such financings will be subject to the following criteria: i. The minimum loan and project criteria as well as any needed bond security will be evaluated on a case-by-case basis; ii. The bond proceeds must be held in trust and administered by an independent trustee selected by the County; The bonds will be distributed pursuant to the following criteria: iii. A majority of the bonds will initially be placed with a single purchaser; iv. The bonds will be sold with a private placement memorandum or a limited offering statement (not an official statement) . This disclosure document should contain extensive disclosure of the specific potential risks; V. A Majority of the bonds shall always be held by a single bond owner; vi. The minimum denominations shall not be less than One Hundred Thousand Dollars ($100, 000) ; vii. The underwriter and the purchaser must each execute a sophisticated investor letter, in a form acceptable to the County; viii.The purchaser must agree to comply with these Guidelines; and ix. The purchaser must represent that the investment represents not more than twenty percent (20%) of the assets of the fund into which it will be placed (this is not to be construed as a percentage of the total funds held) , and that the purchaser has a net worth substantially in excess of the amount of bonds purchased, i.e. , at least 22 times. B - 4 Unless and until the issue is credit enhanced and rated and complies with the guidelines in (A) above: X. Subsequent purchasers will be required to certify that they have received the most recent annual financial statement on the project(s) ; and xi. Subsequent purchasers will be required to certify to the trustee, who in turn will be required to so certify to the County, that requirements (iii) through (ix) have been met. xii. County issuance fees are as follows: 1/8 of 1% ( . 00125) of par payable at closing; 1/8 of 1% ( . 00125) of original principal amount of bonds payable per annum for the Qualified Project Period, plus any additional fees and expenses incurred pursuant to General Requirements (G) and (H) above. ldsl/appendix.agn B - 5 Exhibit 1 ASSURANCE LETTER TO CONTRA COSTA COUNTY FOR QUALIFIED 501(C) (3) NONPROFIT CORPORATIONS 1990 Board of Supervisors Contra Costa County c/o Jim Kennedy Deputy Director - Redevelopment 651 Pine Street, 4th Floor North Wing Martinez, CA 94553 Ladies and. Gentlemen: Contra Costa County (the"County") and (the "Participant") propose to enter into an agreement which will provide. financing for Participant's Project as set forth on the attached Exhibit A and as more specifically defined in the issuing documents. Such financing is made with reference to the following facts: 1. Participant commits to financing the Project in an amount of $ , subject to County approval of the issue and to documentation mutually acceptable to County and Participant. 2. Participant recognizes that the County is not a financial advisor and has made no evaluation of the merits of the proposed financing for Participant. Further, the County has made no representations to the Participant that the proposed financing structure is indeed the best or the only option available to it, and further does not guaranty that the proposed financing will be completed. 3 . As of the time of executing and submitting this Assurance Letter, the Participant commits itself to complete the proposed financing. Should Participant withdraw from the financing at any time subsequent to its execution of this Assurance Letter and' prior to closing, however, it nevertheless hereby agrees to pay its share of all costs associated with the financing including but not limited to those costs and expenses itemized in paragraph 4 hereof. 4. Participant agrees to and obligates itself to pay all costs and fees involved in the issuance including, but limited to, those fees charged by bond counsel; corporation counsel; feasibility consultants; trustee's initial and annual fees; B - 6 County's initial and annual fees; initial and annual insurance fees, if applicable; rating agency fees; certificate printing costs; title insurance costs, if applicable; and limited offering memorandum or official statement costs. It is understood that such costs are to be paid from the proceeds of the issuance at the time of closing. In the event the issuance is not consummated for any reason, participant nevertheless hereby agrees to pay any and all costs and fees expended in furtherance of the issuance, including County expenses. 5. Participant recognizes that it may be required at closing to pay for or have agreed to repay the,�County for--out-of-pocket costs which are not expected to be paid from the proceeds of the issue at closing, including but not limited to title and rental interruption and other insurance, financial advisors and feasibility consultants, whether or not the proposed financing is completed. 6. Participant is a duly organized and validly existing nonprofit corporation organized and existing under the laws of the State of California which is exempt from the payment of taxes under the Internal Revenue Code Section 501(c) (3) and will have full legal right, power and authority to (i) acquire, construct, operate, repair and maintain the Project; (ii) execute and deliver this Assurance Letter; and (iii) carry out and consummate the transaction contemplated by this Assurance Letter. 7. The Board of Directors of Participant has duly authorized and .approved the execution and delivery of and the performance by Participant of the obligations on its part contained in this Assurance Letter and the consummation by it of the transactions contemplated by this Letter. 8. Prior to or concurrently with approval of this Assurance Letter, the Board of Directors of Participant has received, reviewed and understands the Guidelines for the Issuance adopted by the County and hereby agrees to comply with each and every term thereof. 9. This Assurance Letter has been duly authorized, executed and delivered by Participant and constitutes a valid, binding and enforceable obligation of the Participant in accordance with its terms, except as the same may be limited by bankruptcy, insolvency and other laws affecting creditors' rights generally and except as the enforceability of indemnification provisions of this Assurance Letter may be, limited by applicable law. B 7 c 10. Participant agrees to indemnify and hold harmless the County, its officers, agents and employees against any and all judgements, losses, claims, damages, liabilities and expenses, including attorneys' fees and costs of defense, arising out of or related to this Assurance Letter and the obligations set forth herein including, but limited to, the Participant's obligation to pay any costs, fees or expenses. 11. Participant agrees to cooperate with and timely provide any and all submittals and all other requests made of it whether by the underwriter, bond counsel, the County, the insurer, financial advisor or any other involved party. If the foregoing is in accordance with your understanding of the agreement between us, kindly sign and return to the County the enclosed duplicate of this Assurance Letter with Exhibit A completed and attached whereupon this will constitute a binding agreement between us in accordance with the terms hereof. Very truly yours, By: Name/Title Accepted and confirmed as of the date first above written: CONTRA COSTA COUNTY By: Name/Title ldsl/assuranc.ltr B — 8 I Y � � J u EXHIBIT A Description of Project i ldsl/assuranc.ltr B - 9 C rn m Q CL C cn O N > E O O O Np '00 L c O w O O N O O ` C E L O 'a O Z Q Q 0 Q-C m •� U c c 0 O H d C T D N O N 41O O= j U � O O .O C 00 O Lo O O E N M LO 0 Z c n Y U c -o o X a cn c U O O 0Z CD 0 o O W � O w W V W N (nW O C d O LL a W f0 Q p V f- f- E- C C F. Q ,, p Z Z U Z D Z (p J W W W LU N 0 c — — — m U) 1- H h O U U U U w w w w O O O O a a a a oc r- o a o U U U Uo U a� LO E E LL p oa� LL U U `n `n 2 U O +� W W C W O O w Q. U) U) U -o U) N L a CL O O O N0 c -C O C Z Z U oC Z O O Z to w C � O cl U O N c = O0 � U c _ m mC > N O c N p CD E +r N O O U) Q U cn p cD p N Q o O 0 .—TL 4� C CO N O Oc U Q( md OCCU mN ' co= > NO co Q c ' m C OM Ey :3 N ZLLJ LLJ Cy J `S i 1 SOCIAL SERVICE DEPARTMENT CONTRA COSTA COUNTY 1 MEMO TO Jim Kennedy DATE: 11/26/90 FROM :_ Barbara Bunn McCulloug&�� cc Jim Rydingsword Linda Canan RE Multi-Family Bond Financing This is written to support your Department 's efforts to develop the potential for County-supported Bond Financing specifically targeting 501c3 organizations. I have one concern, however, which is the apparent barrier against the development of Single Room Occupancy (SRO) type of structures with this financing mechanism. I am also concerned about the ability of non-profits to use this financing mechanism to increase the numbers of single family homes (and/or small apartment projects, such as duplexes) to develop Special User Housing such as Sober Living Homes and Supported Living complexes for the mentally ill . Housing affordability is clearly a major problem in Contra Costa County and is one of .the chief, underlying causes of homelessness . However, the single person who often _has other problems such as mental illness and substance abuse problems, overwhelms the service side of the public sector and is over-represented among the "visible" homeless . The need to target the development of housing affordable to this group is a high priority and I would hope that financing made available through the County's efforts would take these needs into account If you have any questions regarding these comments, or if I am mistaken in my assumptions, please let me know. I can be reached. at 646-5137 .