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Housing & Redevelopment Authority - HRA-Packet-04-18-2023 Supporting Documents - 04/18/2023
OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY & COMMUNITY DEVELOPMENT AGENCY BOARD PACKET April 18, 2023 1 of 83 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY & COMMUNITY DEVELOPMENT AGENCY AGENDAS Government Services Center, Commissioners’ Room 500 West Fir Avenue, Fergus Falls, MN April 18, 2023 HOUSING AND REDEVELOPMENT AUTHORITY MEETING AGENDA 11:45am 1.Call Meeting to Order and Roll Call – Chairperson 2.Approval of Agenda 3.Approval of Consent AgendaA.Regular Board Meeting Minutes, March 21, 2023 B.Housing Choice Voucher Rental Assistance Program Report March 2023 C.Community Housing Investment Programs Report March 2023 D.Public Housing Program Report March 2023 E.Check Report and March 2023 Financial Reports 4.Old Business A.Resolution No. 235 Authorizing Execution of the Architectural and Engineering Services Agreement With Design Intent 5.New BusinessA.Resolution No. 236 Adopting Capital Asset, Capitalization, and Disposition of Assets Policy B.Resolution No. 237 Resolution Authorizing Execution of Change Order for Hidden Meadows Bid Alternate #1C.6.DiscussionA.North Fields of Dalton Project Update B.HRA Commissioner Training, Part 1 7.Executive Director Report 8.General Discussion – Topics by Commissioners 9.Adjourn The next HRA Board Meeting will be Tuesday, May 16, 2023 at 11:45am, held in the Dead Lake Room, Government Services Center. CDA Board meeting follows at 1:00pm. 2 of 83 2 COMMUNITY DEVELOPMENT AGENCY MEETING AGENDA 1:00pm 1. Call to Order 2. Approval of Agenda 3. Approval of Consent Agenda A. March 21, 2023 Regular Meeting Minutes B. March 2023 Financial Reports 4. Reports and Presentations A. Director Status Report B. Committee Reports Housing Growth and Investment Workforce Support and Development Childcare Investment C. ‘On the Map’ Report D. Board Member Updates 5. Regular Business Items A. Erhards Grove Townhall Property Accept Transfer of Property (survey attached) Review Disposition Process B. Resolution Authorizing Purchase of 106 and 108 N Lincoln Ave, Battle Lake 6. Discussion and Communications A. Other Communications B. Upcoming meeting: Tuesday, May 16, 2023 at 1:00pm, Dead Lake Room, Government Services Center with HRA Board meeting beginning at 11:45am 7. Adjourn 3 of 83 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 3. CONSENT AGENDA 4 of 83 !!) EOU/\L HOUSING OPPORTUNITY The Otter Tail County HRA Board of Commissioners Met for a regular meeting on March 21, 2023 at 12:00pm At the Otter Tail County Government Services Center 500 W Fir Ave, Fergus Falls, MN Board Members Present: Wayne Johnson, Chairperson Jeff Ackerson Kurt Mortenson Betty Murphy Leland Rogness, Vice Chairperson Others Present: Barbara Dacy, OTC HRA Executive Director Amy Baldwin, OTC CDA Director Tanya Westra, OTC HRA Project Manager Paula Grunewald, OTC HRA Administrative Assistant Via Teams Julie Bakken, OTC HRA Accounting Specialist 1. CALL TO ORDER Chairperson Johnson called the meeting to order at 12:00p.m. 2. APPROVAL OF AGENDA No additions were made. Motion made by Kurt Mortenson, second by Lee Rogness to approve the March 21, 2023 Agenda with no changes. Motion passed unanimously. 3. APPROVAL OF CONSENT AGENDA ITEMS No items were pulled for discussion. Motion made by Lee Rogness, second by Jeff Ackerson to approve the Consent Agenda. Motion passed unanimously. 4. New Business A. Resolution No. 234 Amending Resolution No. 198 Regarding the Transfer of Assets and Assignment of Obligations of the Housing and Redevelopment Authority in and for Otter Tail County to the Community Development Agency of Otter Tail County, and the Asset and Liability Transfer Agreement Therefor, and Declaring the Intent to Dissolve the Housing and Redevelopment Authority in and for Otter Tail County Barbara Dacy, Otter Tail County HRA Executive Director explained that after the CDA and HRA Joint Work Session held on February 21, 2023 the Commissioners chose to continue with their individual boards. Resolution 198 would have transferred Assets and Assignment of Obligations of the HRA to the CDA as of January 1, 2024. Resolution 234 would put a pause on this and preserve the previous approvals, preserve the ability to dissolve at a future time and does not specify an effect date for dissolution. At this time, Barbara will transmit this to the County Board for their deliberation. Motion made by Wayne Mortenson, second by Betty Murphy to approve. Motion passed unanimously. 5 of 83 218-998-8730 @ OTTER TAIL COUNTY I HOUSING OTTER TAIL COUNTY IS AN EQUAL OPPORTUNITY EMPLOYER LIVE VO U R best life H E RE . Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 @ ottertailcountymn.us Pg. 2 B. Resolution No. 235 Authoring Execution of the Architectural and Engineering Services Agreement with Design Intent Director Dacy explained that more time is needed for preparation and discussion before entering into this agreement. She requested a motion to table this Resolution No. 235 until the April 18th, 2023 meeting. Motion made by Lee Rogness, second by Murphy to approve. Motion passed unanimously. 5. DISCUSSION HRA MN NAHRO Commissioner Training Director Dacy discussed the MN NAHRO Commissioner Training – “Understanding the Multifaceted Role of the HRA Commissioner Online Series”. There are 5 sessions with a cost of $350/commissioner. Dacy will contact MN NAHRO with a question on “if the sessions can or will be recorded” for a Commissioner that is unable to attend a session. After discussion, HRA will purchase 3 seats for Jeff Ackerson, Wayne Johnson and Kurt Mortenson. Finance Committee Dacy stated that the Board should appoint two Commissioners to the HRA Finance Committee. Kurt Mortenson and Wayne Johnson volunteered since they are on the County Board Finance Committee. Motion made by Lee Rogness, second by Jeff Ackerson to approve. Motion passed unanimously. Meeting Logistics Due to length needed for some of the HRA meetings Director Dacy asked if the commissioners were able to meet earlier. Adjusting the role of the consent Agenda to include routine items may help speed up the meeting. It was determined to start the meeting at 11:45 a.m. Director Dacy also asked if Meeting Minutes needed to be emailed prior to the packet. Commissioners were okay with them not being emailed prior to receiving the packet. 6. EXECUTIVE DIRECTOR REPORT Dacy informed the commissioners about the West Central Minnesota “Homework Starts with Home” program. Both HRA and the County have been a Local Government Partner to help people transition out of homelessness. Clay County HRA administers the rental assistance portion and Mahube-OTWA provides services. Dacy told the commissioners that all HRAs are required by HUD to conduct a survey of residential rental housing owners regarding rent, utilities, and amenities for market rate housing. She stated that this is called Rent Reasonableness, where rents must be comparable for voucher units to rents for similar unassisted units in the marketplace. A questionnaire will be prepared with the Otter Tail County Assessor’s Office as this information is needed for both offices. 7. GENERAL DISCUSSION – TOPICS BY COMMISSIONERS Make sure that the calendar is updated to the new time of 11:45 a.m. for HRA Board Meetings. 8. ADJOURNMENT At 12:38pm a motion was unanimously carried to adjourn the meeting. _______________________ _____________________________ Kurt Mortenson/Secretary/Clerk Date 6 of 83 3/31/2023 4/1/2023 Difference 43,126.48$ $43,388.48 262.00$ 100 98 -2 *HAP Transactions 40,104.00$ *Utility Reimbursements 572.00$ * Portability Tranactions (Out) 2,306.00$ * Portablilty Admin Fee (Paid) 144.48$ Hold Landlord Transaction (538.00)$ 3/31 4/1 New Admissions 2 End Participation 4 Shop Mode/ARS 1 Ports-Out Paid 3 3 Ports Out Pending 0 0 Ports In Pending 0 0 12-Apr-23 Waiting List/To Date 7 Applications in Progress 16 Vouchers "on the street"21 ELI%83% Monthly Trend Report*Units Available Units Leased Leasing %Budget % Per Unit $ October 2022 144 98 68.9% 86.0% 395.84$ November 2022 144 96 68.7% 86.0% 395.85$ December 2022 144 95 68.4% 86.0% 400.56$ January 2023 144 97 67.4% 94.0% 409.33$ February 2023 144 100 67.8% 94.7% 428.52$ March 2023 144 100 69.8% 97.5% 431.81$ *Leasing % and Budget % based on cumulative activity during calendar year Per Unit $ is rolling three month average OTC Section 8 Housing Choice Voucher Rental Assistance Program Summary of Actions March 31, 2023 Program Total Financial Transaction Paid This Month* UML (Unit Months Leased or # of Households) 7 of 83 OTTERTAIL COUNTY -MINNESOTA 218-998-8730 I I OTTER TAIL COUNTY I HOUSING Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 ottertailcounty.gov hra@co.ottertail.mn.us COMMUNITY HOUSING INVESTMENT PROGRAMS (CHIP) BOARD REPORT March 2023 Program Applications Approved Applications Denied Inspections Conducted Proceed to Work Issued Projects Complete Goal Program End Date Emergency Home Repair Program (EHRP) On-Going Down Payment Assistance (DPA) 1 1 On-Going SCDP: Reuse 1 On-Going Rent Rehab - RR On-Going Affordable Rental Unit Construction - ARUC On-Going BATTLE LAKE 09/30/2023 SCDP: Commercial 2 1 1 8 SCDP: Homeowner 7 4 7 5 3 20 Residential Owner-Occupied Leverage (ROHL) 2 3 2 UNDERWOOD 09/30/2023 SCDP: Homeowner 12 3 12 9 7 17 Residential Owner-Occupied Leverage (ROHL) 5 5 4 8 of 83 (!? EOU!IL HOUSING OPPORTUNITY PUBLIC HOUSING BOARD REPORT March 2023 Rents Payable $4,256 Rents Collected $4,256 Total Negative Rents $221 Negative Rents Paid $0 Late Fees Charged $75 Late Fees Collected $75 Number of Units Paying Flat/Ceiling Rent 4 Fiscal Year ELI 100% WAITING LIST 2 Bedroom 37 3 Bedroom 18 4 Bedroom 11 VACANCIES UNIT VACATED LEASE SIGNED 0 Units owned by the OTC HRA 13 Scattered Site Units 3 Bedroom Single Family Home 1 New York Mills 1 Henning 3 Bedroom Duplex 1 New York Mills 1 Henning 1 Underwood 1 Pelican Rapids 4 Bedroom Single Family Home 1 New York Mills 1 Henning 1 Underwood 9 of 83 1:i) EQUAL HOUSING OPPORTUNITY Doc Num Voided Type Document Recipient 24 No DD Barbara Dacy LLC 25 No DD Betty Murphy 26 No DD Jeff A Ackerson 27 No DD Wayne Johnson 1284 No CHK Cynthia Yuen Arbit 1285 No CHK HighPoint Homes Inc 1286 No CHK Kevin Currie 1287 No CHK Language Line Services Inc 1288 No CHK Management Computer Services Inc 1289 No CHK Contractor Compliance & Monitoring Inc 1290 No CHK Minnesota NAHRO Doc Num Voided Type Document Recipient 02/14/23- 03/14/23 No INV Cardmember Service Payments $81,247.62 $81,247.62 Count 4 7 1 12 Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register General Revolving (GR) Posted Payments Payment Date Document Description Cleared Amount 03/10/2023 February 2023 Contract Services Yes $9,743.45 03/10/2023 Per Diem & Mileage Feb 23 Yes $101.86 03/10/2023 Per Diem & Mileage Feb 23 Yes $82.21 03/10/2023 Per Diem & Mileage Feb 23 Yes $101.86 03/10/2023 January/February 2023 Technical Assistance Yes $1,116.25 03/10/2023 Hidden Meadows Pay App #5 Yes $63,680.00 03/10/2023 Dalton North Fields, PR Garage Site, Hidden Meadows Yes $4,207.19 03/10/2023 Over-The-Phone Interpretaton Yes $46.06 03/10/2023 1099 Processing Yes $102.50 03/24/2023 Hidden Meadow Phase 1 March 2023 Labor Compliance Yes $750.00 03/24/2023 Commissioner Online Training 2023 for 3 Commissioners No $1,050.00 Cleared: 10 $79,931.38 Uncleared: 1 $1,050.00 Total Payments: 11 $80,981.38 Unposted Payments Payment Date Document Description Cleared Amount No $266.24 Cleared: 0 $0.00 Uncleared: 1 $266.24 Total Payments: 1 $266.24 Direct Deposit (DD)$10,029.38 Check (CHK) 03/14/2023 Training, AIA Forms, Office Supplies Type Summary Bank: FM Bank, Bank Account: 9311043703, GL Account: 1111Document Type Amount End of Report $70,952.00 Invoice (INV)$266.24 Total:$81,247.62 Project Summary Bank: FM Bank, Bank Account: 9311043703, GL Account: 1111Program - Project Deposits General Revolving (GR) - General Revolving $0.00 Total:$0.00 www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 4/5/2023 2:22:53 PM Printed by: Julie Bakken 10 of 83 25% Period YTD Annual Remaining Amount Amount Budget Budget INCOME 3610 Interest Income 3703/5353/3741/0054 317.93 888.18 1,800.00 (911.82)49% 3690 Other Revenue MISC 75.00 1,575.00 1,575.00 3690.01 SCDP Administration (DEED) - All Communities 1,204.00 85,000.00 (83,796.00)1% 3690.02 SCDP City/Grant Funds - All Communities 8,028.00 444,920.00 (436,892.00)2% 3690.99 Refunds & Reimbursements 2,103.60 3,779.28 3,779.28 3691 Levy Revenue 14,505.38 1,309,725.00 (1,295,219.62)1% 3693.01 CHIP Emerg Housing Repair Program (EHRP) Repayment 6,842.00 6,842.00 3693.03 CHIP FFHRA Rehab Repayments 24,012.90 24,012.90 24,012.90 3693.05 CHIP Rental Rehab Revolving Loan Payments 2,103.74 4,657.44 31,821.00 (27,163.56)15% 3695.01 MHFA Loan Distributions - All Projects 63,680.00 251,195.00 500,000.00 (248,805.00)50% 3695.02 MHFA Grant Distributions - All Projects 516,000.00 (516,000.00)0% 3698 Developer Fees 75,000.00 (75,000.00)0% 3699 Sale of Property 745,000.00 (745,000.00)0% TOTAL INCOME 92,293.17 316,687.18 3,709,266.00 (3,392,578.82) EXPENSES 4130 Legal 30,000.00 30,000.00 0% 4140 Staff Training 1,125.00 2,641.00 5,000.00 2,359.00 53% 4150 Travel 4,300.00 4,300.00 0% 4170 Accounting 60,000.00 60,000.00 0% 4171 Audit 16,100.00 16,100.00 0% 4190 Other Administrative Expenses 200.00 200.00 0% 4190.01 Manuals, Subscriptions 478.00 200.00 (278.00)239% 4190.02 Office Supplies 85.09 709.24 1,700.00 990.76 42% 4190.03 Postage 4,500.00 4,500.00 0% 4190.04 Telephone & Internet 300.00 300.00 0% 4190.05 Dues 791.74 1,000.00 208.26 79% 4190.06 Advertising 76.32 1,300.00 1,223.68 6% 4190.08 Consulting Fees 1,162.31 1,242.08 28,000.00 26,757.92 4% 4190.2 Management Fees-OTC Admin 364,342.00 364,342.00 0% 4190.21 Management Fees-Administrator Contract 9,743.45 19,486.90 116,918.00 97,431.10 17% 4190.22 Management Fees - Construction Consultant 4,207.19 7,558.55 40,000.00 32,441.45 19% 4210 Board Member Payments 285.93 663.89 4,900.00 4,236.11 14% 4430.1 Misc Contracts - Software 102.50 6,155.50 5,000.00 (1,155.50)123% 4510 Insurance 612.00 35,000.00 34,388.00 2% 4521 Assessments 420.00 420.00 0% 4570 Housing Choice Voucher Operating Support 30,000.00 30,000.00 0% 4580 Public Housing Operating Support 20,000.00 20,000.00 0% 4590.01 SCDP O & E Reports (85.00)2,000.00 2,085.00 -4% 4590.02 SCDP Lead Based Paint Testing 325.00 10,000.00 9,675.00 3% 4590.03 SCDP Construction (DEED)4,620.00 432,000.00 427,380.00 1% 4590.04 SCDP Recording Fees 920.00 920.00 0% 4590.05 SCDP General Expense - Leverage 212,007.00 212,007.00 0% 4591 MHFA Impact Fund Expenses 63,680.00 214,722.00 1,016,000.00 801,278.00 21% 4591.01 MHFA Administration/Overrun 750.00 2,250.00 75,000.00 72,750.00 3% 4591.02 MHFA Loan Repayment 745,000.00 745,000.00 0% 4592.01 HOP Demolition/Site Clearance 40,000.00 40,000.00 0% 4593.02 CAP Property Acquisition 25,000.00 25,000.00 0% 4593.03 Consulting Fees 30,000.00 30,000.00 0% 4594 CHIP Down Payment Assistance 50,000.00 50,000.00 0% 4595.01 CHIP Emergency Housing Repair Program (EHRP)40,000.00 40,000.00 0% 4595.02 CHIP Res Owner Occupied Housing Leverage (ROHL)70,000.00 70,000.00 0% 4595.04 CHIP Affordable Rental Unit Constr (ARUC) Program 70,000.00 70,000.00 0% 4595.05 CHIP Rental Rehabilitation Loan 20,000.00 20,000.00 0% TOTAL EXPENSES 81,141.47 262,247.22 3,607,107.00 3,344,859.78 7% SURPLUS 11,151.70 54,439.96 102,159.00 (47,719.04)53% Otter Tail County Housing Redevelopment Authority Operating Statement Three Months Ending 03/31/2023 Program: General Revolving (GR) Project: Consolidated Percent of Year www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 4/5/2023 2:17:19 PM Printed by: Julie Bakken 11 of 83 Period Amount Balance ASSETS 1111 Cash 8,998.19 682,585.25 1111.1 Certificates of Deposit 142,048.22 1111.2 Cash MHFA Loan Acct #0054 0.35 4,079.05 1111.3 Cash Committed for Hidden Meadows 375,000.00 1111.4 Committed for Housing Trust Fund 542,596.00 1113 Cash Rent Rehab 2,153.16 292,112.56 1130.1 Loan Receivable-Rental Rehab 245,098.36 1130.2 Loan Receivable-Down Payment Assistance 89,138.00 1130.3 Loan Receivable-Tax Levy Rehab Provision 331,010.72 1130.4 Loan Receivable-Homeowner Rehab 629,281.00 1130.9 Loan Allowance (960,291.72) 1135.5 Taxes Receivable 16,095.00 1400.12 Assets Held for Resale 1,051.00 TOTAL ASSETS 11,151.70 2,389,803.44 LIABILITIES AND SURPLUS LIABILITIES TOTAL LIABILITIES SURPLUS 2700 Income/Expense Clearing Account 421,444.43 2806 Unrestricted Net Position 1,913,919.05 2806 Unrestricted Net Position (Current Year) 11,151.70 54,439.96 TOTAL SURPLUS 11,151.70 2,389,803.44 TOTAL LIABILITIES AND SURPLUS 11,151.70 2,389,803.44 Otter Tail County Housing Redevelopment Authority Balance Sheet March 2023 Program: General Revolving (GR) Project: Consolidated www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 4/5/2023 2:17:19 PM Printed by: Julie Bakken 12 of 83 Doc Num Voided Type 315 No DD 316 No DD 317 No DD 318 No DD 319 No DD 320 No DD 321 No DD 322 No DD 323 No DD 324 No DD 325 No DD 326 No DD 327 No DD 328 No DD 329 No DD 330 No DD 331 No DD 332 No DD 333 No DD 334 No DD 335 No DD 336 No DD 337 No DD 338 No DD 339 No DD 340 No DD 341 No DD 342 No DD 343 No DD 344 No DD 345 No DD 346 No DD 347 No DD 348 No DD 349 No DD 350 No DD 351 No DD 352 No DD 353 No DD 354 No DD 5947 No CHK 5948 No CHK 5949 No CHK Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register Housing Choice Vouchers Posted Payments 03/01/2023 HAP Payment Mar 23 Yes $339.00 03/01/2023 HAP Payment Mar 23 Yes $324.00 Payment Date Document Description Cleared Amount 03/01/2023 HAP Payment Mar 23 Yes $579.00 03/01/2023 HAP Payment Mar 23 Yes $394.00 03/01/2023 HAP Payment Mar 23 Yes $386.00 03/01/2023 HAP Payment Mar 23 Yes $289.00 03/01/2023 HAP Payment Mar 23 Yes $358.00 03/01/2023 HAP Payment Mar 23 Yes $7,510.00 03/01/2023 HAP Payment Mar 23 Yes $1,319.00 03/01/2023 HAP Payment Mar 23 Yes $342.00 03/01/2023 HAP Payment Mar 23 Yes $925.00 03/01/2023 HAP Payment Mar 23 Yes $710.00 03/01/2023 HAP Payment Mar 23 Yes $723.00 03/01/2023 HAP Payment Mar 23 Yes $675.00 03/01/2023 HAP Payment Mar 23 Yes $405.00 03/01/2023 HAP Payment Mar 23 Yes $900.00 03/01/2023 HAP Payment Mar 23 Yes $849.00 03/01/2023 HAP Payment Mar 23 Yes $150.00 03/01/2023 HAP Payment Mar 23 Yes $3,949.00 03/01/2023 HAP Payment Mar 23 Yes $296.00 03/01/2023 HAP Payment Mar 23 Yes $1,137.00 03/01/2023 HAP Payment Mar 23 Yes $348.00 03/01/2023 HAP Payment Mar 23 Yes $2,800.00 03/01/2023 HAP Payment Mar 23 Yes $365.00 03/01/2023 HAP Payment Mar 23 Yes $670.00 03/01/2023 HAP Payment Mar 23 Yes $268.00 03/01/2023 HAP Payment Mar 23 Yes $380.00 03/01/2023 HAP Payment Mar 23 Yes $207.00 03/01/2023 HAP Payment Mar 23 Yes $572.00 03/01/2023 HAP Payment Mar 23 Yes $316.00 03/01/2023 HAP Payment Mar 23 Yes $396.00 03/01/2023 HAP Payment Mar 23 Yes $291.00 03/01/2023 HAP Payment Mar 23 Yes $674.00 03/01/2023 HAP Payment Mar 23 Yes $280.00 03/01/2023 HAP Payment Mar 23 Yes $1,282.00 03/01/2023 HAP Payment Mar 23 Yes $629.00 03/01/2023 HAP Payment Mar 23 Yes $268.00 03/01/2023 HAP Payment Mar 23 Yes $350.00 03/01/2023 HAP Payment Mar 23 Yes $574.00 03/01/2023 HAP Payment Mar 23 Yes $1,080.00 03/01/2023 HAP Payment Mar 23 Yes $330.00 03/01/2023 HAP Payment Mar 23 Yes $414.00 03/01/2023 HAP Payment Mar 23 Yes $675.00 www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 2 4/5/2023 2:23:50 PM Printed by: Julie Bakken 13 of 83 Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register Housing Choice Vouchers 5950 No CHK 5951 No CHK 5952 No CHK 5953 No CHK 5954 No CHK 5955 No CHK 5956 No CHK 5957 No CHK 5958 No CHK 5959 No CHK 5960 No CHK 5961 No CHK 5962 No CHK 5963 No CHK 5964 No CHK 5965 No CHK 5966 No CHK 5967 No CHK 5968 No CHK 5969 No CHK 12933 No ADJ Payments $42,761.48 $42,761.48 Count 40 23 1 64 03/01/2023 HAP Payment Mar 23 No $413.00 03/01/2023 HAP Payment Mar 23 Yes $624.00 03/01/2023 HAP Payment Mar 23 Yes $572.00 03/01/2023 HAP Payment Mar 23 Yes $699.00 03/01/2023 HAP Payment Mar 23 Yes $926.00 03/01/2023 HAP Util Payment Mar 23 Yes $89.00 03/01/2023 HAP Payment Mar 23 Yes $653.00 03/01/2023 HAP Payment Mar 23 Yes $331.00 03/01/2023 HAP Util Payment Mar 23 Yes $172.00 03/01/2023 HAP Util Payment Mar 23 Yes $84.00 03/01/2023 HAP Util Payment Mar 23 No $2.00 03/01/2023 HAP Util Payment Mar 23 Yes $8.00 03/01/2023 HAP Util Payment Mar 23 Yes $18.00 03/01/2023 HAP Util Payment Mar 23 Yes $5.00 03/01/2023 HAP Util Payment Mar 23 No $28.00 03/01/2023 HAP Util Payment Mar 23 Yes $148.00 03/01/2023 Port Out Payment Mar 23 Yes $898.16 03/01/2023 Port Out Payment Mar 23 Yes $1,070.16 03/01/2023 HAP Util Payment Mar 23 Yes $18.00 03/01/2023 Port Out Payment Mar 23 Yes $482.16 03/01/2023 HAP Manual Adjustment Mar Yes ($207.00) Cleared: 61 $42,318.48 Uncleared: 3 $443.00 Total Payments: 64 $42,761.48 End of Report $9,325.48 Hap Adjustment Advice ($207.00) Total:$42,761.48 Project Summary Program - Project Deposits Housing Choice $0.00 Total:$0.00 Type Summary Document Type Amount Direct Deposit (DD)$33,643.00 Check (CHK) www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 2 of 2 4/5/2023 2:23:50 PM Printed by: Julie Bakken 14 of 83 Period Amount Balance ASSETS 1111 Cash Unrestricted 2,809.05 68,267.46 TOTAL ASSETS 2,809.05 68,267.46 LIABILITIES AND SURPLUS LIABILITIES 2112 A/P HAP 593.00 593.00 TOTAL LIABILITIES 593.00 593.00 SURPLUS 2700 Inc & Exp Clearing 4,078.69 2805 Restricted Net Position 22,114.50 2805 Restricted Net Position (Current Year) (3,730.00)(6,830.76) 2806 Unrestricted Position 29,099.93 2806 Unrestricted Position (Current Year) 5,946.05 19,212.10 TOTAL SURPLUS 2,216.05 67,674.46 TOTAL LIABILITIES AND SURPLUS 2,809.05 68,267.46 Otter Tail County Housing Redevelopment Authority Balance Sheet March 2023 Program: Housing Choice Vouchers Project: Consolidated www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 4/5/2023 2:19:36 PM Printed by: Julie Bakken 15 of 83 25% Period YTD Annual Remaining Amount Amount Budget Budget INCOME 3301 Admin Subsidy 6,092.00 18,290.00 79,201.00 (60,911.00)23% 3301.1 HAP Subsidy 39,273.00 117,817.00 434,498.00 (316,681.00)27% 3450 Fraud Recovery - Admin 50%1,632.24 1,632.24 3450.1 Fraud Recapture HAP 50%1,632.24 1,632.24 3610 Investment Income (0062)9.53 25.58 105.00 (79.42)24% 3690.1 Other Revenue HAP 30,000.00 (30,000.00)0% TOTAL INCOME 45,374.53 139,397.06 543,804.00 (404,406.94)26% EXPENSES 4150 Travel 201.09 1,200.00 998.91 17% 4190 Other Admin Expenses (Apps, Service Charges)11.00 197.51 120.00 (77.51)165% 4190.01 Manuals, Subscriptions 240.00 240.00 0% 4190.08 Consulting Fees 1,945.00 1,945.00 0% 4190.2 Management Fees-OTC 93,887.00 93,887.00 0% 4715.1 HAP Occupied Units 40,642.00 121,007.00 394,904.00 273,897.00 31% 4715.P HAP-Portability Out 2,361.00 5,273.00 32,462.00 27,189.00 16% 4716.P Port Out Admin Fee 144.48 337.12 1,423.00 1,085.88 24% TOTAL EXPENSES 43,158.48 127,015.72 526,181.00 399,165.28 24% SURPLUS 2,216.05 12,381.34 17,623.00 (5,241.66)70% Otter Tail County Housing Redevelopment Authority Operating Statement Three Months Ending 03/31/2023 Program: Housing Choice Vouchers Project: Consolidated Percent of Year www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 4/5/2023 2:19:36 PM Printed by: Julie Bakken 16 of 83 Doc Num Voided Type 7245 No CHK 7246 No CHK 7247 No CHK 7248 No CHK 01-00000621-00-0 03/07/23 No INV 01-00041004-06 03/07/23 No INV 01-00041101-00-0 03/06/23 No INV 01-00041152-00-6 03/06/23 No INV 991 721 5394 4 02/07/23 No INV Doc Num Voided Type 1058 No CHK 1059 No CHK 1060 No CHK 1181 No CHK 1304 No CHK 1801 No CHK 1802 No CHK 1804 No CHK 2804 No CHK 3415 No CHK 3489 No CHK 5261 No CHK 5262 No CHK 5511 No CHK 719.86 No VD 020525823 No MO 020527348 No MO 82329937 No CHK 82332322 No CHK 2740747032 No MO 28524245523 No MO 2854224021 No MO 28647050040 No MO 28647051028 No MO Payment Date Document Description Cleared Amount 03/10/2023 Replace Gas Water Heater Yes $1,628.60 Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register Public Housing Posted Payments 03/10/2023 Water, Sewer Yes $439.50 03/06/2023 Water, Electric, Gas, Sewer Yes $393.28 03/10/2023 Gas Yes $610.25 03/10/2023 Solar Salt Yes $20.40 03/06/2023 Water, Electric, Gas, Sewer Yes $334.03 03/02/2023 Gas Yes $127.35 03/06/2023 Water, Electric, Gas, Sewer Yes $240.00 03/06/2023 Water, Electric, Gas, Sewer Yes $278.93 Posted Deposits Control Date Document Description Cleared Amount Cleared: 9 $4,072.34 Uncleared: 0 $0.00 Total Payments: 9 $4,072.34 03/24/2023 Payment - Check Yes $90.65 03/20/2023 Payment - Check Yes $220.98 03/07/2023 Payment - Check Yes $400.00 03/20/2023 Payment - Check Yes $123.77 03/07/2023 Payment - Check Yes $63.76 03/20/2023 Payment - Check Yes $96.87 03/02/2023 Payment - Check Yes $384.77 03/02/2023 Payment - Check Yes $725.00 03/02/2023 Payment - Check Yes $840.00 03/02/2023 Payment - Check Yes $349.61 03/02/2023 Payment - Check Yes $1,000.00 03/28/2023 Payment - Check Yes $625.00 03/03/2023 incorrect amount Yes ($719.86) 03/02/2023 Payment - Money Order Yes $300.00 03/15/2023 Payment - Check Yes $660.06 03/15/2023 Payment - Check Yes $902.03 03/02/2023 Payment - Check Yes $212.00 03/02/2023 Payment - Money Order Yes $188.00 03/28/2023 Payment - Money Order Yes $90.00 03/02/2023 Payment - Check Yes $392.00 03/02/2023 Payment - Money Order Yes $180.00 03/15/2023 Payment - Money Order Yes $225.00 03/24/2023 Payment - Money Order Yes $60.00 03/24/2023 Payment - Money Order Yes $272.00 Cleared: 24 $7,681.64 www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 2 4/5/2023 2:25:48 PM Printed by: Julie Bakken 17 of 83 Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register Public Housing Doc Num Voided Type 01-00000683-00-0 03/28/23 No INV 01-00000684-00-1 03/28/23 No INV 10108 02/22/23- 03/23/23 No INV 10350 02/22/23- 03/23/23 No INV 10787 02/22/23- 03/23/23 No INV 1129723 03/20/23 No INV 1130792 03/20/23 No INV 1130796 03/20/23 No INV 1130799 03/20/23 No INV 1130903 03/20/23 No INV 20072296 03/20/23 No INV 991 721 5394 4 03/10/23 No INV Payments $5,031.41 $5,031.41 Count 20 1 7 17 45 Unposted Payments Payment Date Document Description Cleared Amount Uncleared: 0 $0.00 Total Deposits: 24 $7,681.64 03/27/2023 Water, Sewer No $91.40 03/27/2023 Water, Sewer No $86.30 03/30/2023 Water, Sewer No $63.80 03/30/2023 Water, Sewer No $59.46 03/20/2023 Electric No $94.05 03/20/2023 Electric No $75.79 03/27/2023 Water, Sewer No $89.92 03/20/2023 Electric No $55.00 03/20/2023 Electric No $110.53 03/13/2023 Gas No $110.27 03/20/2023 Electric No $68.55 03/20/2023 Electric No $54.00 $4,387.75 Void Payment (VD) Cleared: 0 $0.00 Uncleared: 12 $959.07 Total Payments: 12 $959.07 Total:$2,650.23 End of Report ($719.86) Money Order (MO)$1,315.00 Invoice (INV)$2,332.66 Project Summary Bank: FM Bank, Bank Account: 9314130070, GL Program - Project Deposits Public Housing - Family Housing $7,681.64 Total:$7,681.64 Type Summary Bank: FM Bank, Bank Account: 9314130070, GL Document Type Amount Check (CHK) www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 2 of 2 4/5/2023 2:25:48 PM Printed by: Julie Bakken 18 of 83 Period Amount Balance ASSETS 1111 Cash 8,824.85 113,174.01 1114 Tenant Security Deposit Cash 9,044.40 1122 A/R Tenants (1,026.96)1,213.10 1122.1 Allowance for Doubtful Accts (200.00) 1122.9 A/R Tenant Repayment Agreements (175.00)316.82 1400.5 Accumulated Depreciation (1,062,666.01) 1400.6 Land 32,990.31 1400.7 Buildings 1,688,010.51 1400.8 Furn/Equip/Mach - Dwellings 21,132.31 TOTAL ASSETS 7,622.89 803,015.45 LIABILITIES AND SURPLUS LIABILITIES 2114 Tenant Security Deposits 9,044.40 2240 Tenants Prepaid Rent (200.51)1,208.04 TOTAL LIABILITIES (200.51)10,252.44 SURPLUS 2700 Income/Expense Clearing Account (3,829.09) 2802 Invested in Capital Assets, Net of Related Debt 679,466.94 2806 Unrestricted Net Position 93,154.93 2806 Unrestricted Net Position (Current Year) 7,823.40 23,970.23 TOTAL SURPLUS 7,823.40 792,763.01 TOTAL LIABILITIES AND SURPLUS 7,622.89 803,015.45 Otter Tail County Housing Redevelopment Authority Balance Sheet March 2023 Program: Public Housing Project: Consolidated www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 4/5/2023 2:20:52 PM Printed by: Julie Bakken 19 of 83 25% Period YTD Annual Remaining Amount Amount Budget Budget INCOME 3110 Dwelling Rental 4,034.98 11,941.00 25,000.00 (13,059.00)48% 3401.1 HUD Operating Subsidy 3,804.00 11,412.00 45,000.00 (33,588.00)25% 3401.2 HUD Capital Funds-Operations/Admin 14,363.00 7,000.00 7,363.00 205% 3401.3 HUD Capital Funds-Project 1,628.60 1,628.60 33,000.00 (31,371.40)5% 3610 Interest Income (5673/0070)20.17 47.17 40.00 7.17 118% 3690 Other Income (NSF, Late Fee, GR Support)75.00 277.00 21,000.00 (20,723.00)1% 3690.1 Water Charge Income 602.83 1,776.76 6,300.00 (4,523.24)28% 3690.2 Electric Charge Income 764.60 2,791.45 8,550.00 (5,758.55)33% 3690.3 Gas Charge Income 1,215.94 2,826.35 11,000.00 (8,173.65)26% 3690.31 Sewer Charge Income 706.70 2,082.31 7,350.00 (5,267.69)28% TOTAL INCOME 12,852.82 49,145.64 164,240.00 (115,094.36)30% EXPENSES 4130 Legal 750.00 750.00 4140 Staff Training 500.00 500.00 0% 4150 Travel 22.27 1,000.00 977.73 2% 4171 Audit 2,000.00 2,000.00 0% 4190 Other Admin Expenses (Reports, Apps)2,100.00 2,100.00 0% 4190.01 Manuals, Subscriptions 500.00 500.00 0% 4190.02 Office Supplies 750.00 750.00 0% 4190.03 Postage 500.00 500.00 0% 4190.06 Advertising 200.00 200.00 0% 4190.08 Consulting Fees 1,945.00 1,945.00 0% 4190.2 Management Fees-OTC 17,000.00 17,000.00 0% 4310 Water 601.44 1,221.34 6,400.00 5,178.66 19% 4320 Electric 840.65 1,516.13 8,700.00 7,183.87 17% 4330 Gas 1,233.02 2,416.94 11,500.00 9,083.06 21% 4331 Sewer 705.31 1,421.90 7,500.00 6,078.10 19% 4400 Maintenance - Tools & Equip 750.00 750.00 0% 4420 Maintenance - Materials 11.16 5,500.00 5,488.84 0% 4430 Maintenance - Contracts 20.40 1,174.47 20,000.00 18,825.53 6% 4431 Garbage and Trash Removal Contracts 500.00 500.00 0% 4510 Insurance 15,762.60 15,763.00 0.40 100% 4520 PILOT 1,200.00 1,200.00 0% 4521 Assessments 1,200.00 1,200.00 0% 4570 Collection Loss 500.00 500.00 0% 4580 Interest Expense (on Security Deposits)300.00 300.00 0% 4600 Capital Fund Projects 1,628.60 1,628.60 33,000.00 31,371.40 5% 4610 Extraordinary Maintenance 3,500.00 3,500.00 0% TOTAL EXPENSES 5,029.42 25,175.41 143,558.00 118,382.59 18% SURPLUS 7,823.40 23,970.23 20,682.00 3,288.23 116% Otter Tail County Housing Redevelopment Authority Operating Statement Three Months Ending 03/31/2023 Program: Public Housing Project: Consolidated Percent of Year www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 4/5/2023 2:20:54 PM Printed by: Julie Bakken 20 of 83 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 4. OLD BUSINESS 21 of 83 !!) EOU/\L HOUSING OPPORTUNITY OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION _April 18, 2023__ BOARD MEETING DATE AGENDA ITEM # 4A Administration ORIGINATING DEPARTMENT/SERVICE Barbara Dacy 4/13/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 235 Authoring Execution of the Architectural and Engineering Services Agreement with Design Intent PROPOSED REQUEST/JUSTIFICATION The purpose of this resolution is to approve the proposed contract with “Design Intent” for architectural and engineering services for the North Fields of Dalton affordable senior housing development. Design Intent was selected as a result of a Request for Qualification process. The proposed services include preparation of schematic drawings, building elevations, and “permit set” documents for the two proposed triplexes. Supplemental services include architectural interior design selections (except plumbing fixtures) and preparation of the state required utility plan. The total cost for all of these services is $31,537. The contract provides that the schematic designs can be used by the HRA through March 2025. Approval of the resolution authorizing execution is recommended. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 4/13/2023 ATTACHMENT LIST: FINANCIAL IMPLICATIONS: $31,537 BUDGETED: X YES NO FUNDING: General Revolving Fund COMMENTS 22 of 83 RESOLUTION NO. 235 RESOLUTION AUTHORIZING EXECUTION OF THE ARCHITECTURAL AND ENGINEERING SERVICES AGREEMENT WITH DESIGN INTENT WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) is empowered by Minnesota Statute 469 to carry out redevelopment activities; and WHEREAS, the City of Dalton (the “City”) owns property located on and near Court Street, the former location of a manufactured home park (the “Property”); and WHEREA, on March 28, 2017, the Authority approved a check for $45,000 to assist the City of Dalton with acquisition costs of the Property; and WHEREAS, on June 30, 2020 the City requested the Authority to remove remaining vacant manufactured homes and to assist the City with redevelopment of the Property; and WHEREAS, the Authority has previously completed demolition and disposal of manufactured homes on the Property; and WHEREAS, on July 16, 2020, the Authority approved Resolution No. 136 authorizing up to $30,000 for demolition, site clearance, and mitigation of the remaining homes on the Property; and WHEREAS, Resolution No. 136 also resolved that it was appropriate for the Authority to work with the City to redevelop the Property; and WHEREAS, on May 4, 2021, the City adopted a resolution determining a need for the Authority to exercise its powers in the City of Dalton; and WHEREAS, the Authority has reviewed preliminary development concepts for affordable senior rental housing for certain portions of the property, to be named the “North Fields of Dalton” (the “Project”); and WHEREAS, on December 8, 2022, the Authority approved Resolution No. 228 authorizing the Executive Director to conduct a Request for Qualifications process for Architectural and Engineering services; and WHEREAS, on February 10, 2023, Design Intent of Fergus Falls, Minnesota was the selected for Architectural and Engineering services for the Project; and WHEREAS, Exhibit A reflects the Architectural and Engineering Services Agreement (the “Agreement”) between the Authority and Design Intent and is incorporated herein and attached hereto. 23 of 83 . NOW, THEREFORE, IT IS HEREBY RESOLVED: 1. That the Chair and Secretary are authorized to execute the Agreement. 2. That the Executive Director is hereby empowered to undertake any action associated with the Agreement as she may determine necessary to effectuate the provisions of the Agreement in the name of the Authority. Upon the motion of _______________, seconded by _________________, and passed on a ___________________ vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 18th day of April, 2023. Dated: _______________________________ OTTER TAIL COUNTY AUTHORITY BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 24 of 83 AIA® Document B107™ – 2020 Standard Form of Agreement Between Developer- and Architect for Prototype(s) for a One or Two Family Residential Project with Limited Architectural Services AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e- mail docinfo@aiacontracts.com. User Notes: (1248948602) 1 ADDITIONS AND DELETIONS: The author of this document has added information needed for its completion. The author may also have revised the text of the original AIA standard form. An Additions and Deletions Report that notes added information as well as revisions to the standard form text is available from the author and should be reviewed. This document has important legal consequences. Consultation with an attorney is encouraged with respect to its completion or modification. ELECTRONIC COPYING of any portion of this AIA® Document to another electronic file is prohibited and constitutes a violation of copyright laws as set forth in the footer of this document. AGREEMENT made as of the Eighteenth/ day of «April » in the year «Twenty Three » (In words, indicate day, month, and year.) BETWEEN the Architect’s client identified as the Developer-: (Name, legal status, address, and other information) «Ottertail County Housing and Redevelopment Authority »« » « 500 W. Fir St. » «Fergus Falls, MN 56537 » « » and the Architect: (Name, legal status, address, and other information) « Design Intent Architects P.A.»« » « 103 East Lincoln Ave. » « Fergus Falls, MN 56537 » « » for the following Project: (Name, location, and detailed description of each prototype) «North Fields of Dalton – Senior Housing » « 118 Court St. Dalton, MN 56324» « Project consists of two triplexes on one lot. Each triplex to contain two 2-bedroom and one 1-bedroom senior rental units. Each unit to have an attached one car garage. The structures to be built on concrete slab foundations.» The Developer and Architect agree as follows. 25 of 83 DRAFT - - AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 2 TABLE OF ARTICLES 1 INITIAL INFORMATION 2 ARCHITECT’S RESPONSIBILITIES 3 SCOPE OF ARCHITECT’S BASIC SERVICES 4 SUPPLEMENTAL AND ADDITIONAL SERVICES 5 DEVELOPER-’S RESPONSIBILITIES 6 COST OF THE WORK 7 COPYRIGHTS AND LICENSES 8 CLAIMS AND DISPUTES 9 TERMINATION OR SUSPENSION 10 MISCELLANEOUS PROVISIONS 11 COMPENSATION 12 INSURANCE 13 SPECIAL TERMS AND CONDITIONS 14 SCOPE OF THE AGREEMENT ARTICLE 1 INITIAL INFORMATION § 1.1 For purposes of this Agreement, the “Project” is defined as the prototype(s) of the one- or two-family residence(s) described on page 1 of this Agreement and does not include subsequent residences constructed from the Developer reuse of the Architect’s Instruments of Service. § 1.2 Instruments of Service are representations, in any medium of expression now known or later developed, of the tangible and intangible creative work performed by the Architect and the Architect’s consultants under their respective professional services agreements. Instruments of Service may include, without limitation, studies, surveys, models, sketches, drawings, specifications, and other similar materials. § 1.3 This Agreement is based on the Initial Information set forth below: (State details of the Project’s site and program, Developer contractors and consultants, Developer representative, Architect’s consultants, Architect’s representative, Developer-’s budget for the Cost of the Work, design milestone dates, Sustainable Objective, if any, and other information relevant to the Project.) « See “Project Development Notes” attached as Exhibit A, and “Preliminary Project Schedule” attached as Exhibit B» § 1.4 The Developer and Architect may rely on the Initial Information. Both parties, however, recognize that the Initial Information may materially change and, in that event, the Developer and the Architect shall appropriately adjust the Architect’s services, schedule for the Architect’s services, and the Architect’s compensation. In the event the Architect declares the project has materially changed, and the Developer- agrees, the Developer shall adjust the Developer budget for the Cost of the Work and the Developer-’s anticipated design milestones, as necessary, to accommodate material changes in the Initial Information. § 1.5 The parties shall agree upon protocols governing the transmission and use of Instruments of Service or any other information or documentation in digital form. 26 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 3 § 1.5.1 Any use of, or reliance on, all or a portion of a building information model without agreement to protocols governing the use of, and reliance on, the information contained in the model shall be at the using or relying party’s sole risk and without liability to the other party and its contractors or consultants, the authors of, or contributors to, the building information model, and each of their agents and employees. ARTICLE 2 ARCHITECT’S RESPONSIBILITIES § 2.1 The Architect shall provide professional services as set forth in this Agreement. The Architect represents that it is properly licensed in the jurisdiction where the Project is located to provide the services required by this Agreement, or shall cause such services to be performed by appropriately licensed design professionals. § 2.2 The Architect shall perform the limited services for the Project defined in this Agreement consistent with the professional skill and care ordinarily provided by architects performing such limited services for a knowledgeable residential developer- of the type described in Section 5.2 in the jurisdiction in which the Project is being constructed. The Architect shall perform its services as expeditiously as is consistent with such professional skill and care and the orderly progress of the Project. § 2.3 The Architect shall identify a representative authorized to act on behalf of the Architect with respect to the Project. § 2.4 The Architect shall not engage in any activity, or accept any employment, interest, or contribution that would reasonably appear to compromise the Architect’s professional judgment with respect to services to be rendered in connection with this Project. ARTICLE 3 SCOPE OF ARCHITECT’S BASIC SERVICES § 3.1 The Architect’s Basic Services consist of those described in Article 3 and by the “Design Scope of Work Summary” attached as Exhibit C. Services not set forth in Article 3 or Exhibit C are Supplemental or Additional Services. The Architect shall include civil and structural design as part of the Architect’s Basic Services only to the extent required for the Permit Set Documents in the jurisdiction where the Project is located. § 3.1.1 The Architect shall manage the Architect’s services, consult with the Developer, research applicable design criteria, attend design meetings with the Developer- and the Architect’s consultants, communicate with the Architect’s consultants, and report progress to the Developer. § 3.1.2 The Architect shall coordinate its services with those services provided by the Developer and the Developer’s consultants. The Architect shall be entitled to rely on, and shall not be responsible for, the accuracy, completeness, and timeliness of services and information furnished by the Developer- and the Developer’s consultants. The Architect shall provide prompt written notice to the Developer if the Architect becomes aware of any error, omission, or inconsistency in such services or information. § 3.1.3 As soon as practicable after the date of this Agreement, the Architect shall submit for the Developer’s approval a schedule for the performance of the Architect’s services. The schedule initially shall include anticipated dates for the Architect to submit the Schematic Design Documents and Permit Set Documents to the Developer. The schedule shall include allowances for periods of time required for the Developer’s review, for the performance of the Developer’s consultants, and for approval of submissions by authorities having jurisdiction over the Project. Once approved by the Developer, time limits established by the schedule shall not, except for reasonable cause, be exceeded by the Architect or Developer. With the Developer’s approval, the Architect shall adjust the schedule, if necessary, as the Project proceeds until submittal of the Permit Set Documents. § 3.1.4 The Architect shall not be responsible for any directives, substitutions, or selections made by the Developer or the Developer’s consultants and contractors. The Architect shall not be responsible for the Developer’s acceptance of non-conforming Work, made or given without the Architect’s written approval. The Architect assumes no responsibility for the Developer’s or the Developer’s consultants and contractors selection of any specific material or product, fabrication technique, or the means or methods of installation. § 3.1.5 The Architect shall respond to applicable design requirements imposed by governmental authorities required to approve the Permit Set Documents. 27 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 4 § 3.2 Schematic Design Phase Services § 3.2.1 The Architect shall review the program and other information furnished by the Developer, and shall review laws, codes, and regulations applicable to the Architect’s services. § 3.2.2 The Architect shall prepare a preliminary evaluation of the Developer’s program, Project site, and other Initial Information, each in terms of the other, to ascertain the requirements of the Project. The Architect shall notify the Developer of (1) any inconsistencies discovered in the information, and (2) other information or consulting services that may be reasonably needed for the Project. § 3.2.3 The Architect shall present its preliminary evaluation to the Developer and shall discuss with the Developer alternative approaches to design of the Project. The Architect shall reach an understanding with the Developer regarding the requirements of the Project. § 3.2.4 Based on the Project requirements agreed upon with the Developer, the Architect shall prepare and present, for the Developer’s approval, a preliminary design illustrating the scale and relationship of the Project components. § 3.2.5 Based on the Developer’s approval of the preliminary design, the Architect shall prepare Schematic Design Documents for the Developer’s approval. The Schematic Design Documents shall consist of drawings and other documents including a site plan, if appropriate, and preliminary building plans, sections and elevations; and may include some combination of study models, perspective sketches, or digital representations. Preliminary selections of major building systems and construction materials shall be noted on the drawings or described in writing. § 3.2.5.1 The Architect shall consider sustainable design alternatives together with other considerations based on program and aesthetics, in developing a design that is consistent with the Developer’s program, schedule, and budget for the Cost of the Work. The Developer may obtain more advanced sustainable design services as a Supplemental Service under Section 4.1.1. § 3.2.5.2 The Architect shall consider the value of alternative materials, building systems and equipment, together with other considerations based on program and aesthetics, in developing a design for the Project that is consistent with the Developer’s program, schedule, and budget for the Cost of the Work. § 3.2.6 The Architect shall submit the Schematic Design Documents to the Developer and request the Developer’s approval. The Architect shall also submit the Schematic Design Documents to the Minnesota DLI for review and approval. § 3.3 Permit Set Phase Services § 3.3.1 Based on the Developer’s approval of the Schematic Design Documents, and on the Developer’s authorization of any adjustments in the Project requirements and the budget for the Cost of the Work, the Architect shall prepare Permit Set Documents. § 3.3.2 The Permit Set Documents shall be consistent with the Schematic Design Documents and shall consist of the necessary documentation of the design required to obtain a building permit in the jurisdiction in which the Project is located. The Architect shall incorporate into the Permit Set Documents the design requirements of governmental authorities having jurisdiction over the Project and submit the Permit Set Documents to the Developer. § 3.4 Permitting Phase Services. Relative to Architect’s services, the Architect shall provide responses to review comments of governmental authorities having jurisdiction over the Project, if any, and update the Permit Set Documents as necessary based on such responses. § 3.5 Construction Phase Services § 3.5.1 The Architect shall have no responsibility to observe the Work or visit the Project site, except as agreed to by the Developer and Architect as an Additional Service pursuant to Section 4.2.2.10. § 3.5.2 Subject to Section 5.19, the Architect shall respond to requests for information from the Developer that are specifically related to the Architect’s Instruments of Service. The Architect shall have authority to act on behalf of the Developer only to the extent provided in this Agreement. The Architect shall not have control over, charge of, or 28 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 5 responsibility for the construction means, methods, techniques, sequences, or procedures, or for safety precautions and programs in connection with the Work, nor shall the Architect be responsible for the Developer’s failure to perform the Work in accordance with the requirements of the Permit Set Documents. The Architect shall be responsible for the Architect’s negligent acts or omissions, but shall not have control over or charge of, and shall not be responsible for, acts or omissions of the Developer or of any other persons or entities performing portions of the Work. § 3.5.3 Subject to Section 4.2, the Architect’s responsibility to provide Construction Phase Services for each prototype commences when construction of that prototype begins and terminates on the date of the certificate of occupancy for that prototype or when that prototype may be occupied for its intended use, whichever occurs first. Notwithstanding the foregoing, Architect’s responsibility to provide Construction Phase Services shall terminate not more than «two hundred seventy four » ( «274 » ) days from the date of commencement of the Work of that prototype. § 3.5.4 The Architect shall review, approve, or take other appropriate action on submittals for which approval by the Architect is required by the governmental authority having jurisdiction over the Project, and for materials and equipment specified by the Architect and the Architect’s consultants unless the Developer agrees that Architect review is not required for specific items § 3.5.4.1 The Architect shall review and comment on submittals with reasonable promptness while allowing sufficient time, in the Architect’s professional judgment, to permit adequate review. The Architect’s review of submittals is only for the limited purpose of checking for conformance with information given and the design concept expressed in the Permit Set Documents. Review of such submittals is not for the purpose of determining the accuracy and completeness of other information such as dimensions, quantities, and installation or performance of equipment or systems, which are the Developer’s responsibility. The Architect’s review shall not constitute approval of safety precautions or of any construction means, methods, techniques, sequences, or procedures. ARTICLE 4 SUPPLEMENTAL AND ADDITIONAL SERVICES § 4.1 Supplemental Services § 4.1.1 The services listed below are not included in Basic Services but may be required for the Project. The Architect shall provide the listed Supplemental Services only if specifically designated in the table below as the Architect’s responsibility, and the Developer shall compensate the Architect as provided in Section 11.2. Unless otherwise specifically addressed in this Agreement, if neither the Developer nor the Architect is designated, the parties agree that the listed Supplemental Service is not being provided for the Project. (Designate the Architect’s Supplemental Services and the Developer’s Supplemental Services required for the Project by indicating whether the Architect or Developer shall be responsible for providing the identified Supplemental Service. Insert a description of the Supplemental Services in Section 4.1.2 below or attach the description of services as an Exhibit to this Agreement.) Supplemental Services Responsibility (Architect, Developer, or not provided) § 4.1.1.1 Programming Developer § 4.1.1.2 Site evaluation and project feasibility Developer § 4.1.1.3 Up to 3 Multiple preliminary designs Architect § 4.1.1.4 Code review for additional sites N/A § 4.1.1.5 Building Information Model management responsibilities N/A § 4.1.1.6 Development of Building Information Models for post construction use N/A § 4.1.1.7 Assist Developer with filing documents required for the approval of governmental authorities Architect § 4.1.1.8 Civil engineering (utility Plan) Architect § 4.1.1.9 Landscape design N/A 29 of 83 - ~ I , , I I I I I AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 6 Supplemental Services Responsibility (Architect, Developer, or not provided) § 4.1.1.10 Architectural interior design (flooring, paint, Kitchen layout, countertops noted on plan) HRA will select plumbing & light fixtures Architect § 4.1.1.11 Sustainable Project Services pursuant to Section 4.1.3 N/A § 4.1.1.12 Fast-track design services N/A § 4.1.1.13 Furniture, furnishings, equipment design N/A § 4.1.1.14 Other services provided by specialty Consultants Developer § 4.1.1.15 Other Supplemental Services Developer § 4.1.2 Description of Supplemental Services § 4.1.2.1 A description of each Supplemental Service identified in Section 4.1.1 as the Architect’s responsibility is provided below. (Describe in detail the Architect’s Supplemental Services identified in Section 4.1.1 or, if set forth in an Exhibit, identify the Exhibit. The AIA publishes a number of Standard Form of Architect’s Services documents that can be included as an Exhibit to describe the Architect’s Supplemental Services.) « 4.1.1.3 – Architectural design may be altered by the HVAC and solar alternatives being considered so there may be up to three (3) multiple floor plans in consideration prior to the permit set being completed. 4.1.1.7 – State utility plan fee to be paid by Developer. 4.1.1.8 – Provide the minimum site plan design required to comply with municipal and state requirements. 4.1.1.10 – Provide kitchen layouts and elevations. Coordinate locations of mechanical/electrical rooms and duct/plumbing chases. Note on Drawings interior finish materials that provide value and maximize durability. » § 4.1.2.2 A description of each Supplemental Service identified in Section 4.1.1 as the Developer’s responsibility is provided below. (Describe in detail the Developer’s Supplemental Services identified in Section 4.1.1 or, if set forth in an Exhibit, identify the Exhibit.) «4.1.1.1 & 4.1.1.2- These services have previously been completed by the Otter Tail County HRA 4.1.1.14 & 4.1.1.15 – The OTC HRA will seek solar power design services from a third party. The HRA will also contract to have the general, mechanical and electrical contractors, along with Otter Tail Power participate in the integrated design process as needed to achieve the optimum design solutions. » § 4.1.3 If the Developer identified a Sustainable Objective in Article 1, the Architect shall provide, as a Supplemental Service, the Sustainability Services required in AIA Document E204™–2017, Sustainable Projects Exhibit, attached to this Agreement. The Developer shall compensate the Architect as provided in Section 11.2. § 4.2 Architect’s Additional Services § 4.2.1 The Architect may provide Additional Services after execution of this Agreement without invalidating the Agreement. Except for services required due to the fault of the Architect, any Additional Services provided in accordance with this Section 4.2 shall entitle the Architect to compensation pursuant to Section 11.3 and an appropriate adjustment in the Architect’s schedule. § 4.2.2 Upon recognizing the need to perform the following Additional Services, the Architect shall notify the Developer with reasonable promptness and explain the facts and circumstances giving rise to the need. The Architect shall not proceed to provide the following Additional Services until the Architect receives the Developer’s written authorization: .1 Services necessitated by a change in the Initial Information, previous instructions or approvals given by the Developer, or a material change in the Project including size, quality, complexity, the Developer’s schedule or budget for Cost of the Work, or procurement or delivery method; 30 of 83 n I I -7 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 7 .2 Services necessitated by the enactment or revision of codes, laws, or regulations, including changing or editing previously prepared Instruments of Service; .3 Changing or editing previously prepared Instruments of Service necessitated by official interpretations of applicable codes, laws, or regulations that are either (a) contrary to specific interpretations by the applicable authorities having jurisdiction made prior to the issuance of the building permit, or (b) contrary to requirements of the Instruments of Service when those Instruments of Service were prepared in accordance with the applicable standard of care; .4 Changing or editing prepared Instruments of Services for re-submittal to authorities having jurisdiction necessitated by decisions or instructions of the Developer after the issuance of the building permit; .5 Services necessitated by decisions of the Developer not rendered in a timely manner or any other failure of performance on the part of the Developer or the Developer’s consultants or contractors; .6 Preparing digital models or other design documentation for transmission to the Developer’s consultants and contractors, or to other Developer authorized recipients; .7 Preparation for, and attendance at, a presentation, meeting or hearing with parties other than the Developer, the Developer’s consultants, or the Architect’s consultants; .8 Preparation for, and attendance at, a dispute resolution proceeding or legal proceeding, except where the Architect is party thereto; .9 Site visits to observe construction of a specific element(s) designed by the Architect as requested by the Developer and subject to the agreement of the Architect. Site visits shall not include observation of any other portion of the Work beyond what the parties agree to as an Additional Service and shall in no case include inspection of the Work; .10 Review of submittals in addition to those required in Section 3.5.4, subject to the Architect’s agreement to review such submittals; or, .11 Modifying Instruments of Services used on the Project as requested by the Developer for reuse on subsequent residences. § 4.2.3 If the services covered by this Agreement have not been completed within « eighteen » ( « 18 » ) months of the date of this Agreement, through no fault of the Architect, extension of the Architect’s services beyond that time shall be compensated as Additional Services. ARTICLE 5 DEVELOPER’S RESPONSIBILITIES § 5.1 The Developer represents that it will contract with a contractor licensed to perform the Work and is solely responsible for the Work. § 5.2 The Developer shall contract with an entity knowledgeable about, and experienced with, building codes, laws, and regulations that apply to the Project. The Developer shall also contract with an entity be knowledgeable about, and experienced with, the selection of materials and systems; construction costs; and methods of installation and construction. The Developer shall be contract with an entity capable of completing the development of the design through construction of the Project based on the Permit Set Documents. § 5.3 Unless otherwise provided for under this Agreement, the Developer shall provide information in a timely manner regarding requirements for, and limitations on, the Project, including a written program, which shall set forth the Developer’s objectives; schedule; constraints and criteria, including space requirements and relationships; flexibility; expandability; special equipment; systems; and site requirements. § 5.4 The Developer shall establish the Developer’s budget for the Project, including (1) the budget for the Cost of the Work as defined in Section 6.1; (2) the Developer’s other costs; and, (3) reasonable contingencies related to all of these costs. The Developer shall update the Developer’s budget for the Project as necessary throughout the duration of the Project until final completion. The Developer is responsible for preparing all estimates of the Cost of the Work. If the Developer significantly increases or decreases the Developer’s budget for the Cost of the Work, the Developer shall notify the Architect. The Developer and the Architect shall thereafter agree to a corresponding change in the Project’s scope and quality. § 5.5 The Developer shall identify a representative authorized to act on the Developer’s behalf with respect to the Project. The Developer shall render decisions and approve the Architect’s submittals in a timely manner in order to avoid unreasonable delay in the orderly and sequential progress of the Architect’s services. 31 of 83 - AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 8 § 5.6 The Developer shall furnish surveys to describe physical characteristics, legal limitations and utility locations for the site of the Project, and a written legal description of the site. The surveys and legal information shall include, as applicable, grades and lines of streets, alleys, pavements and adjoining property and structures; designated wetlands; adjacent drainage; rights-of-way, restrictions, easements, encroachments, zoning, deed restrictions, boundaries and contours of the site; locations, dimensions, and other necessary data with respect to existing buildings, other improvements and trees; and information concerning available utility services and lines, both public and private, above and below grade, including inverts and depths. All the information on the survey shall be referenced to a Project benchmark. § 5.7 The Developer shall furnish the services of all consultants reasonably required by the scope of the Project or authorities having jurisdiction over the Project except as provided for in Section 3.1. § 5.8 The Developer shall furnish services of geotechnical engineers, which may include test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, seismic evaluation, ground corrosion tests and resistivity tests, including necessary operations for anticipating subsoil conditions, with written reports and appropriate recommendations. § 5.9 The Developer shall provide the Supplemental Services designated as the Developer’s responsibility in Section 4.1.1. § 5.10 If the Developer identified a Sustainable Objective in Article 1, the Developer shall fulfill its responsibilities as required in AIA Document E204–2017, Sustainable Projects Exhibit, attached to this Agreement. § 5.11 The Developer shall coordinate the services of its own consultants with those services provided by the Architect. The Developer shall furnish the services of consultants other than those designated as the responsibility of the Architect in this Agreement, or authorize the Architect to furnish them as an Additional Service, when the Architect requests such services and demonstrates that they are reasonably required by the scope of the Project. The Developer shall require that its consultants and contractors maintain insurance, including professional liability insurance as appropriate to the services or work provided. § 5.12 The Developer shall furnish tests, inspections and reports required by law, this Agreement, or the Permit Set Documents, such as structural, mechanical, and chemical tests, tests for air and water pollution, and tests for hazardous materials. § 5.13 The Developer shall furnish all legal, insurance and accounting services, including auditing services, that may be reasonably necessary at any time for the Project to meet the Developer’s needs and interests. § 5.14 Unless required by governmental authorities having jurisdiction over the Project to be provided by the Architect, the Developer shall select specific products and methods of application for (a) mechanical equipment and fixtures, (b) electrical equipment and fixtures, and (c) interior finishes, furnishings, fixtures, and equipment. § 5.15 The Developer shall provide prompt written notice to the Architect if the Developer becomes aware of any fault or defect in the Project, including errors, omissions, or inconsistencies in the Architect’s Instruments of Service. § 5.16 Communications by and with the Architect’s consultants shall be through the Architect. § 5.17 The Developer shall provide the Architect access to the Project site prior to commencement of the construction work and at times when the Architect visits the site in accordance with Section 3.5. § 5.18 The Developer is responsible for filing documents and permit applications with governmental authorities and other entities having jurisdiction over the Project except for the DLI plumbing permit. § 5.19 The Developer shall be responsible for interpreting the Permit Set Documents and for completing the development of the design through construction of the Project. The Developer shall have control over, and be responsible for, design decisions and requirements for the Project that are not addressed in the Permit Set 32 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 9 Documents. The Developer shall be responsible for mitigation of errors, inconsistencies, and omissions discovered after issuance of the Building Permit. § 5.20 The Developer shall be responsible for administering, supervising, observing, inspecting, overseeing, constructing, and completing the Work. § 5.21 Within 15 days after receipt of a written request from the Architect, the Developer shall furnish the requested information as necessary and relevant for the Architect to evaluate, give notice of, or enforce lien rights. ARTICLE 6 COST OF THE WORK § 6.1 For the purposes of this Agreement, the Cost of the Work shall be the total cost to the Developer to construct all elements of the Project included in the Permit Set Documents and shall include general conditions costs, overhead and profit. The Cost of the Work also includes the reasonable value of labor, materials, and equipment, donated to, or otherwise furnished by, the Owner. The Cost of the Work does not include the compensation of the Architect, the costs of the land, rights-of-way, financing, or contingencies for changes in the Work; or other costs that are the responsibility of the Developer. § 6.2 Any use by the Architect of the Developer’s Project budget and of preliminary estimates of the Cost of the Work or detailed estimates of the Cost of the Work prepared by the Developer is solely for the Architect’s guidance in the Architect’s preparation of the Permit Set Documents. Accordingly, the Architect shall be entitled to rely on the accuracy and completeness of the estimates of the Developer. The Architect does not warrant or represent that bids or negotiated prices will not vary from the Developer’s Project budget or from any estimate of the Cost of the Work or evaluation reviewed by the Architect. ARTICLE 7 COPYRIGHTS AND LICENSES § 7.1 The Architect and the Developer warrant that in transmitting Instruments of Service, or any other information, the transmitting party is the copyright owner of such information or has permission from the copyright owner to transmit such information for its use on the Project or subsequent residences. § 7.2 The Architect and the Architect’s consultants shall be deemed the authors and owners of their respective Instruments of Service, including the Drawings and Specifications, and shall retain all common law, statutory and other reserved rights, including copyrights. Submission or distribution of Instruments of Service to meet official regulatory requirements or for similar purposes in connection with the Project or any subsequent residences is not to be construed as publication in derogation of the reserved rights of the Architect and the Architect’s consultants. § 7.3 Use of the Architect’s Instruments of Service on the Project § 7.3.1 The Architect grants to the Developer a nonexclusive license to use the Architect’s Instruments of Service solely and exclusively for purposes of completing the development of the design and constructing, using, maintaining, altering and adding to the Project, provided that the Developer substantially performs its obligations under this Agreement, including prompt payment of all sums due pursuant to Article 9 and Article 11. The Architect shall obtain similar nonexclusive licenses from the Architect’s consultants consistent with this Agreement. The license granted under this section permits the Developer to authorize contractors, subcontractors, sub-subcontractors, and suppliers, as well as the Developer’s consultants, to reproduce applicable portions of the Instruments of Service, subject to any protocols established pursuant to Section 1.5, solely and exclusively for use in performing services or construction for the Project. If the Architect rightfully terminates this Agreement for cause as provided in Section 9.4, the license granted in this Section 7.3 shall terminate. § 7.3.2 In the event the Developer uses the Instruments of Service on the Project without retaining the authors of the Instruments of Service, the Developer releases the Architect and Architect’s consultant(s) from all claims and causes of action arising from such uses. The Developer, to the extent permitted by law, further agrees to indemnify and hold harmless the Architect and its consultants from all costs and expenses, including the cost of defense, related to claims and causes of action asserted by any third person or entity to the extent such costs and expenses arise from the Developer’s use of the Instruments of Service under this Section 7.3.2. The terms of this Section 7.3.2 shall not apply if the Developer rightfully terminates this Agreement for cause under Section 9.4. 33 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 10 § 7.4 Reuse of the Architect’s Instruments of Service on Subsequent Residences § 7.4.1 The Developer may reuse the Architect’s Instruments of Service, with or without design modifications, on subsequent residences subject to the terms of this Section 7.4, provided that the Developer compensates the Architect for such reuse as stipulated in Section 11.9 and compensates the Architect for modifying the Instruments of Service, if applicable, as provided for in Section 11.3. § 7.4.2 The Developer’s license to reuse the Architect’s Instruments of Service on subsequent residences is limited as follows: .1 . .2 The Developer may only construct subsequent residences using the Architect’s Instruments of Service in the following geographic area(s): « Otter Tail County » .3 The Developer shall not reuse the Architect’s Instruments of Service on subsequent residences after the following date: « March 31, 2025 .4 Other: (Insert other limitations on the Developer’s license to reuse the Architect’s Instruments of Service.) « » § 7.4.3 The Developer’s license to reuse the Architect’s Instruments of Service shall terminate if (a) the Architect rightfully terminates this Agreement for cause as provided in Section 9.4 or (b) if the Developer terminates this Agreement for convenience as provided in Sections 9.5. If the Developer rightfully terminates this Agreement for cause as provided in Section 9.4, the Developer may reuse the Architect’s Instruments of Service, subject to the provisions of this Section 7.4 and provided that the Developer compensates the Architect for such reuse in accordance with Section 11.9. § 7.4.4 If the Developer reuses the Instruments of Service on subsequent residences without retaining the Architect to modify the Instruments of Service for reuse on such subsequent residences, the Developer (a) accepts sole responsibility for determining and implementing the modifications to the Instruments of Services necessary for construction of subsequent residences on each site, (b) releases the Architect and its consultants from all claims and causes of action arising from such reuse, and (c) agrees to indemnify and hold harmless the Architect and its consultants from all costs and expenses, including the cost of defense, related to claims and causes of action asserted by any third person or entity to the extent such costs and expenses arise from such reuse. § 7.5 The Developer shall indemnify and hold harmless the Architect, the Architect’s consultants and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of the unauthorized use or reuse of the Architect’s Instruments of Service. § 7.6 Except for the licenses granted in this Article 7, no other license or right shall be deemed granted or implied under this Agreement. The Developer shall not assign, delegate, sublicense, pledge or otherwise transfer any license granted herein to another party without the prior written agreement of the Architect, and without such party’s written agreement to indemnify the Architect to the same extent that the Developer indemnifies the Architect in Sections 7.3.2, 7.4.4, 7.5, and 8.1.4 in a form acceptable to the Architect. § 7.7 Except as otherwise stated in Section 7.3 and 7.4.3, the provisions of this Article 7, and Section 11.9 shall survive the termination of this Agreement. ARTICLE 8 CLAIMS AND DISPUTES § 8.1 General § 8.1.1 The Developer and Architect shall commence all claims and causes of action against the other and arising out of or related to this Agreement, whether in contract, tort, or otherwise, in accordance with the requirements of 34 of 83 • AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 11 the binding dispute resolution method selected in this Agreement and within the period specified by applicable law, but in any case not more than 10 years after the date the Architect completes its Permit Set Phase Services under Section 3.3. The Developer and Architect waive all claims and causes of action not commenced in accordance with this Section 8.1.1. § 8.1.2 To the extent damages are covered by property insurance, the Developer and Architect waive all rights against each other and against the contractors, consultants, agents and employees of the other for damages, except such rights as they may have to the proceeds of such insurance. The Developer or the Architect, as appropriate, shall require of the contractors, consultants, agents and employees of any of them similar waivers in favor of the other parties enumerated herein. § 8.1.3 The Architect and Developer waive consequential damages for claims, disputes or other matters in question arising out of or relating to this Agreement. This mutual waiver is applicable, without limitation, to all consequential damages due to either party’s termination of this Agreement, except as specifically provided in Section 9.7. § 8.1.4 The Developer shall indemnify and hold harmless the Architect, the Architect’s consultants, and the agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, but only to the extent they are caused by the negligent acts or omissions of the Developer, its employees and its consultants. § 8.2 Mediation § 8.2.1 Any claim, dispute or other matter in question arising out of or related to this Agreement shall be subject to mediation as a condition precedent to binding dispute resolution. If such matter relates to or is the subject of a lien arising out of the Architect’s services, the Architect may proceed in accordance with applicable law to comply with the lien notice or filing deadlines prior to resolution of the matter by mediation or by binding dispute resolution. § 8.2.2 The Developer and Architect shall endeavor to resolve claims, disputes and other matters in question between them by mediation, which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association in accordance with its Construction Industry Mediation Procedures in effect on the date of this Agreement. A request for mediation shall be made in writing, delivered to the other party to this Agreement, and filed with the person or entity administering the mediation. The request may be made concurrently with the filing of a complaint or other appropriate demand for binding dispute resolution but, in such event, mediation shall proceed in advance of binding dispute resolution proceedings, which shall be stayed pending mediation for a period of 60 days from the date of filing, unless stayed for a longer period by agreement of the parties or court order. If an arbitration proceeding is stayed pursuant to this section, the parties may nonetheless proceed to the selection of the arbitrator(s) and agree upon a schedule for later proceedings. § 8.2.3 The parties shall share the mediator’s fee and any filing fees equally. The mediation shall be held in the place where the Project is located, unless another location is mutually agreed upon. Agreements reached in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof. § 8.2.4 If the parties do not resolve a dispute through mediation pursuant to this Section 8.2, the method of binding dispute resolution shall be the following: (Check the appropriate box.) [ «X» ] Arbitration pursuant to Section 8.3 of this Agreement. [ «» ] Litigation in a court of competent jurisdiction [ « » ] Other: (Specify) « » If the Developer and Architect do not select a method of binding dispute resolution, or do not subsequently agree in writing to a binding dispute resolution method other than litigation, the dispute will be resolved in a court of competent jurisdiction. 35 of 83 ■ I ■ • AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 12 § 8.3 Arbitration § 8.3.1 If the parties have selected arbitration as the method for binding dispute resolution in this Agreement, any claim, dispute or other matter in question arising out of or related to this Agreement subject to, but not resolved by, mediation shall be subject to arbitration which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association in accordance with its Construction Industry Arbitration Rules in effect on the date of this Agreement. A demand for arbitration shall be made in writing, delivered to the other party to this Agreement, and filed with the person or entity administering the arbitration. § 8.3.1.1 A demand for arbitration shall be made no earlier than concurrently with the filing of a request for mediation, but in no event shall it be made after the date when the institution of legal or equitable proceedings based on the claim, dispute or other matter in question would be barred by the applicable statute of limitations. For statute of limitations purposes, receipt of a written demand for arbitration by the person or entity administering the arbitration shall constitute the institution of legal or equitable proceedings based on the claim, dispute or other matter in question. § 8.3.2 The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by parties to this Agreement shall be specifically enforceable in accordance with applicable law in any court having jurisdiction thereof. § 8.3.3 The award rendered by the arbitrator(s) shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. § 8.3.4 Consolidation or Joinder Not Permitted. No arbitration arising out of or relating to this Agreement shall include, by consolidation or joinder or in any other manner, an additional person or entity not a party to this Agreement, except by written consent containing a specific reference to this Agreement and signed by the Developer, Architect, and any other person or entity sought to be joined. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim, dispute or other matter in question not described in the written consent or with a person or entity not named or described therein. § 8.4 The provisions of this Article 8 shall survive the termination of this Agreement. ARTICLE 9 TERMINATION OR SUSPENSION § 9.1 If the Developer fails to make payments to the Architect in accordance with this Agreement, such failure shall be considered substantial nonperformance and cause for termination or, at the Architect’s option, cause for suspension of performance of services under this Agreement. If the Architect elects to suspend services, the Architect shall give seven days’ written notice to the Developer before suspending services. In the event of a suspension of services, the Architect shall have no liability to the Developer for delay or damage caused the Developer because of such suspension of services. Before resuming services, the Developer shall pay the Architect all sums due prior to suspension and any expenses incurred in the interruption and resumption of the Architect’s services. The Architect’s fees for the remaining services and the time schedules shall be equitably adjusted. § 9.2 If the Developer suspends the Project, the Architect shall be compensated for services performed prior to notice of such suspension. When the Project is resumed, the Architect shall be compensated for expenses incurred in the interruption and resumption of the Architect’s services. The Architect’s fees for the remaining services and the time schedules shall be equitably adjusted. § 9.3 If the Developer suspends the Project for more than 90 cumulative days for reasons other than the fault of the Architect, the Architect may terminate this Agreement by giving not less than seven days’ written notice. § 9.4 Either party may terminate this Agreement upon not less than seven days’ written notice should the other party fail substantially to perform in accordance with the terms of this Agreement through no fault of the party initiating the termination. § 9.5 The Developer may terminate this Agreement upon not less than seven days’ written notice to the Architect for the Developer’s convenience and without cause. 36 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 13 § 9.6 If the Developer terminates this Agreement for its convenience pursuant to Section 9.5, or the Architect terminates this Agreement pursuant to Section 9.3, the Developer shall compensate the Architect for services performed prior to termination, Reimbursable Expenses incurred, and costs attributable to termination, including the costs attributable to the Architect’s termination of consultant agreements. § 9.7 In addition to any amounts paid under Section 9.6, if the Developer terminates this Agreement for its convenience pursuant to Section 9.5, or the Architect terminates this Agreement pursuant to Sections 9.3 or 9.4, the Developer shall pay to the Architect the following fees: (Set forth below the amount of any termination or licensing fee, or the method for determining any termination or licensing fee.) .1 Termination Fee: «payment of services provided under the terms of the contract and unpaid, up to the date of termination » .2 Licensing Fee to allow the Developer to continue using the Architect’s Instruments of Service for this Project only: « $5,000 » § 9.8 The Developer’s rights to use the Architect’s Instruments of Service in the event of a termination of this Agreement are set forth in Article 7 and Section 9.7. ARTICLE 10 MISCELLANEOUS PROVISIONS § 10.1 This Agreement shall be governed by the law of the place where the Project is located, excluding that jurisdiction’s choice of law rules. If the parties have selected arbitration as the method of binding dispute resolution, the Federal Arbitration Act shall govern Section 8.3. § 10.2 The Developer and Architect, respectively, bind themselves, their agents, successors, assigns and legal representatives to this Agreement. Neither the Developer nor the Architect shall assign this Agreement without the written consent of the other, except that the Developer may assign this Agreement to a lender providing financing for the Project if the lender agrees to assume the Developer’s rights and obligations under this Agreement, including any payments due to the Architect by the Developer prior to the assignment. § 10.3 If the Developer requests the Architect to execute certificates, the proposed language of such certificates shall be submitted to the Architect for review at least 14 days prior to the requested dates of execution. If the Developer requests the Architect to execute consents reasonably required to facilitate assignment to a lender, the Architect shall execute all such consents that are consistent with this Agreement, provided the proposed consent is submitted to the Architect for review at least 14 days prior to execution. The Architect shall not be required to execute certificates or consents that would require knowledge, services or responsibilities beyond the scope of this Agreement. § 10.4 Nothing contained in this Agreement shall create a contractual relationship, with or a cause of action in favor of, a third party against either the Developer or Architect. § 10.5 Unless otherwise required in this Agreement, the Architect shall have no responsibility for the discovery, presence, handling, removal or disposal of, or exposure of persons to, hazardous materials or toxic substances in any form at the Project site. § 10.6 The Architect shall have the right to include photographic or artistic representations of the design of the Project among the Architect’s promotional and professional materials. The Architect shall be given reasonable access to the completed Project to make such representations. However, the Architect’s materials shall not include the Developer’s confidential or proprietary information if the Developer has previously advised the Architect in writing of the specific information considered by the Developer to be confidential or proprietary. 37 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 14 § 10.7 If the Architect or Developer receives information specifically designated as “confidential” or “business proprietary,” the receiving party shall keep such information strictly confidential and shall not disclose it to any other person except as set forth in Section 10.7.1. This Section 10.7 shall survive the termination of this Agreement. § 10.7.1 The receiving party may disclose “confidential” or “business proprietary” information after 7 days’ notice to the other party, when required by law, arbitrator’s order, or court order, including a subpoena or other form of compulsory legal process issued by a court or governmental entity, or to the extent such information is reasonably necessary for the receiving party to defend itself in any dispute. The receiving party may also disclose such information to its employees, consultants, or contractors in order to perform services or work solely and exclusively for the Project, provided those employees, consultants, and contractors are subject to the restrictions on the disclosure and use of such information as set forth in this Section 10.7. § 10.8 The invalidity of any provision of the Agreement shall not invalidate the Agreement or its remaining provisions. If it is determined that any provision of the Agreement violates any law, or is otherwise invalid or unenforceable, then that provision shall be revised to the extent necessary to make that provision legal and enforceable. In such case the Agreement shall be construed, to the fullest extent permitted by law, to give effect to the parties’ intentions and purposes in executing the Agreement. ARTICLE 11 COMPENSATION § 11.1 For the Architect’s Basic Services described under Article 3, the Developer shall compensate the Architect as follows: (For each phase, insert basis for compensation such as stipulated sum, percentage basis, hourly, an amount per prototype, or other. The basis may vary with each phase.) .1 Schematic Design Phase « EighteenThousand Nine Hundred Twenty-two Dollars ($18,922.00) .2 Permit Set Phase « Twelve Thousand Six Hundred Fifteen Dollars ($12,615.00) » .3 Permitting Phase « hourly as set forth in attached billing rates » .4 Construction Phase « hourly as set forth in attached billing rates » § 11.2 For the Architect’s Supplemental Services designated in Section 4.1.1 and for any Sustainability Services required pursuant to Section 4.1.3, the Developer shall compensate the Architect as follows. (Insert amount of, or basis for, compensation. If necessary, list specific services to which particular methods of compensation apply.) « Compensation included in amounts listed in article 11.1» § 11.3 For Additional Services that may arise during the course of the Project, including those under Section 4.2, the Developer shall compensate the Architect as follows: (Insert amount of, or basis for, compensation.) « hourly as set forth in attached billing rates » § 11.4 Compensation for Supplemental and Additional Services of the Architect’s consultants when not included in Section 11.2 or 11.3, shall be the amount invoiced to the Architect plus « fifteen » percent ( « 15 » %), or as follows: 38 of 83 - - AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 15 (Insert amount of, or basis for computing, Architect’s consultants’ compensation for Supplemental or Additional Services.) « » § 11.5 When compensation identified in Section 11.1 is on a percentage basis, progress payments for each phase of Basic Services shall be calculated by multiplying the percentages identified in this Article by the Developer’s most recent budget for the Cost of the Work. Compensation paid in previous progress payments shall not be adjusted based on subsequent updates to the Developer’s budget for the Cost of the Work. § 11.6 When compensation is on a percentage basis and any portions of the Project are deleted or otherwise not constructed, compensation for those portions of the Project shall be payable to the extent services are performed on those portions. The Architect shall be entitled to compensation in accordance with this Agreement for all services performed whether or not the Construction Phase is commenced. § 11.7 The hourly billing rates for services of the Architect and the Architect’s consultants are set forth below. The rates shall be adjusted in accordance with the Architect’s and Architect’s consultants’ normal review practices. (If applicable, attach an Exhibit of hourly billing rates or insert them below.) « » Employee or Category Rate ($0.00) Principal-In-Charge Architect I Architect II Structural Engineer I Structural Engineer II Civil Engineer I Civil Engineer II CAD Technician Clerical 225.00 150.00 125.00 150.00 125.00 190.00 150.00 100.00 75.00 § 11.8 Compensation for Reimbursable Expenses § 11.8.1 Reimbursable Expenses are in addition to compensation for Basic, Supplemental, and Additional Services and include expenses incurred by the Architect and the Architect’s consultants directly related to the Project, as follows: .1 Transportation and authorized out-of-town travel; .2 Permitting and other fees required by authorities having jurisdiction over the Project; .3 Printing, reproductions, plots, and standard form documents; .4 Postage, handling, and delivery; .5 Expense of overtime work requiring higher than regular rates, if authorized in advance by the Developer; .6 Renderings, physical models, mock-ups, professional photography, and presentation materials requested by the Developer or required for the Project; .7 All taxes levied on professional services and on reimbursable expenses; .8 Registration fees and any other fees charged by the Certifying Authority or by other entities as necessary to achieve the Sustainable Objective; and, .9 Other similar Project-related expenditures. § 11.8.2 For Reimbursable Expenses the compensation shall be the expenses incurred by the Architect and the Architect’s consultants plus « fifteen » percent ( « 15 » %) of the expenses incurred. § 11.9 Compensation for Reuse of the Architect’s Instruments of Service § 11.9.1 Compensation for reuse of the Architect’s Instruments of Services under Section 7.4 shall be computed as follows: « Architectural, Civil and Structural compensation are based on each site’s specific characteristics. » 39 of 83 I - - AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 16 § 11.9.2 The compensation in Section 11.9.1 does not include compensation for the Architect’s services to modify the Instruments of Service for reuse on subsequent residences. If the Architect is performing such services, the compensation should be included in Section 11.3. « » § 11.11 Payments to the Architect § 11.11.1 Progress Payments § 11.11.1.1 Unless otherwise agreed, payments for services shall be made monthly in proportion to services performed. Payments are due and payable upon presentation of the Architect’s invoice. Amounts unpaid « thirty » ( « 30 » ) days after the invoice date shall bear interest at the rate entered below, or in the absence thereof at the legal rate prevailing from time to time at the principal place of business of the Architect. «twelve » % «per annum» § 11.11.2.2 The Developer shall not withhold amounts from the Architect’s compensation to impose a penalty or liquidated damages on the Architect, or to offset sums requested by or paid to contractors for the cost of changes in the Project, unless the Architect agrees or has been found liable for the amounts in a binding dispute resolution proceeding. § 11.11.2.3 Records of Reimbursable Expenses, expenses pertaining to Supplemental and Additional Services, and services performed on the basis of hourly rates shall be available to the Developer at mutually convenient times. ARTICLE 12 INSURANCE § 12.1 Architect’s Insurance § 12.1.1 The Architect shall maintain the following insurance until termination of this Agreement. If any of the requirements set forth below are in addition to the types and limits the Architect normally maintains, the Developer shall pay the Architect as set forth in Section 11.10. (Identify types and limits of insurance coverage, and other insurance requirements applicable to the Agreement, if any.) .1 General Liability « One Million Dollars ($1,000,000) per occurrence and Two million Dollars in the aggregate for bodily injury and property damage.» .2 Automobile Liability Included in General Liability per State Farm. «Covering Architect owned and non-owned vehicles used by the Architect with policy limits of not less than One Million Dollars ($1,000,000) per accident for bodily injury, death of any person, and other property damage arising out of use of those motor vehicles, along with any other statutorily required automobile coverage. » .3 Workers’ Compensation State Statutory limits are 100,000/500,000/100,000 which we currently follow. «Employer’s Liability with policy limits not less than Five Hundred Thousand Dollars ($500,000) each accident, Five Hundred Thousand Dollars ($500,000) each employee, and Five Hundred Thousand Dollars ($500,000) policy limit » .4 Professional Liability « Professional Liability covering negligent acts, errors and omissions in the performance of professional services with policy limits of not less than One Million Dollars ($1,000,000) per claim and One Million Dollars ($1,000,000) in the aggregate. » 40 of 83 ---- AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 17 .5 Additional Insured Obligations. TO the fullest extent permitted by law, the Architect shall cause the primary and excess or umbrella policies for Commercial General Liability and Automobile Liability to include the Owner as an additional insured for claims caused in whole or in part by the Architect’s negligent acts of omissions. The additional insured coverage shall be primary and non-contributory to any of the Owner’s insurance policies and shall apply to both ongoing and completed operations. § 12. Builder’s Insurance § 12.2.1 The Builder(s) contracted by the Developer shall purchase and maintain insurance of the types and limits of liability, containing the endorsements, and subject to the terms and conditions, as described in this Section 12.2 or elsewhere in the Contract Documents. The Builder(s) shall purchase and maintain the insurance required by this Agreement from an insurance company or insurance companies lawfully authorized to issue insurance in the jurisdiction where the Project is located. The Builder(s) shall maintain the required insurance until one year after the date of the certificate of occupancy for the Project, unless a different duration is stated below: « » § 12.2.2 Commercial General Liability insurance for the Project written on an occurrence form with policy limits of not less than «One Million Five Hundred Thousand Dollars » ($ «1,500,000 » ) each occurrence, « Three Million Dollars » ($ «3,000,000 » ) general aggregate, and «Three Million Dollars » ($ «3,000,000 » ) aggregate for products-completed operations hazard, providing coverage for claims including .1 damages because of bodily injury, sickness or disease, including occupational sickness or disease, and death of any person; .2 personal and advertising injury; .3 damages because of physical damage to or destruction of tangible property, including the loss of use of such property; .4 bodily injury or property damage arising out of completed operations; and .5 the Builder’s indemnity obligations under Section 8.1.4. § 12.2.3 Automobile Liability covering vehicles owned by the Builder(s) and non-owned vehicles used by the Builder(s) , with policy limits of not less than «One Million Five Hundred Thousand Dollars » ($ «1,500,000 » ) per accident, for bodily injury, death of any person, and property damage arising out of the ownership, maintenance, and use of those motor vehicles along with any other statutorily required automobile coverage. § 12.2.4 The Builder(s) may achieve the required limits and coverage for Commercial General Liability and Automobile Liability through a combination of primary and excess or umbrella liability insurance, provided such primary and excess or umbrella insurance policies result in the same or greater coverage as those required under Section 12.2.2 and 12.2.3, and in no event shall any excess or umbrella liability insurance provide narrower coverage than the primary policy. The excess policy shall not require the exhaustion of the underlying limits only through the actual payment by the underlying insurers. § 12.2.5 Workers’ Compensation at statutory limits. § 12.2.6 Employers’ Liability with policy limits not less than «One Million Five Hundred Thousand Dollars » ($ «1,500,000 » ) each accident, «One Million, Five Hundred Thousand Dollars » ($ «1,500,000 » ) each employee, and «Three Million » ($ «3,000,000 » ) policy limit. § 12.2.7 If the Builder(s) is required to furnish professional services as part of the Work, the Builder(s) shall procure Professional Liability insurance covering performance of the professional services, with policy limits of not less than «Three Million Dollars » ($ «3,000,000 » ) per claim and « Three Million Dollars » ($ « » ) in the aggregate. § § 12.2.9 In addition to the above limits, the (s) shall carry an Umbrella Liability insurance policy, with combined policy limits of not less than «One Million Five Hundred Thousand Dollars » ($ «1,500,000 » ) per claim and «Three Million Dollars » ($ «3,000,000 » ) in the aggregate. 41 of 83 ---- • ----- - AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 18 § 12.2.10 The Builder(s) shall provide certificates of insurance acceptable to the Architect evidencing compliance with the requirements in this Section 12.2 at the following times: (1) prior to commencement of the Work; (2) upon renewal or replacement of each required policy of insurance; and (3) upon the Architect’s written request. An additional certificate evidencing continuation of liability coverage, including coverage for completed operations, shall be submitted upon completion of construction of the Project and thereafter upon renewal or replacement of such coverage until the expiration of the period required by Section 12.2.1. § 12.2.11 The Builder(s) shall disclose to the Architect any deductible or self- insured retentions applicable to any insurance required to be provided by the Builder(s). § 12.2.12 Within three (3) business days of the date the Builder(s) becomes aware of an impending or actual cancellation or expiration of any insurance required by this Section 12.2, the Builder(s) shall provide notice to the Architect of such impending or actual cancellation or expiration. Upon receipt of notice from the Builder(s), the Architect shall, unless the lapse in coverage arises from an act or omission of the Architect, have the right to stop performance of the Architect’s services until the lapse in coverage has been cured by the procurement of replacement coverage by the Builder(s). The furnishing of notice by the Builder(s) shall not relieve the Builder(s) of any contractual obligation to provide any required coverage. § 12.2.13 Other Insurance Provided by the Developer (List below any other insurance coverage to be provided by the Developer and any applicable limits.) Coverage Limits Builder ’s Risk The estimated cost of improvements to the property ARTICLE 13 SPECIAL TERMS AND CONDITIONS Special terms and conditions that modify this Agreement are as follows: (Include other terms and conditions applicable to this Agreement.) « «13.1 Add the following sentence to Subparagraph 6.2: Furthermore, Architect has no responsibility for the cost of changes in the Project which may be required as a result of (i) the enactment of revision of codes, laws or regulations subsequent to the preparation of Drawings, Specifications or other documents, or (ii) requirements imposed by municipal or other local building code, fire safety and other inspectors after the municipality or other local authority has issued a building permit or otherwise approved Drawings, Specifications or other documents as conforming with applicable municipal or other local requirements. 13.2 Add the following to Subparagraph 9.2: If the contract for construction has not been awarded within 30 calendar days of the date of receipt of bids (as defined in the bidding documents), subsequent bidding and negotiation services provided by the Architect shall be considered as Additional Services and the Architect shall be compensated on an hourly basis for these services until execution of the Contract for Construction. Services included, but not limited to, meetings with the Owner and/or prospective Contractor(s), assistance with rebidding the Work, evaluation of bids or proposed changes in bidding documents, analysis of product substitutions, etc. Execution of a Contract for Construction constitutes authorization by the Owner to the Architect to proceed with services of the Construction Phase. 13.3 Add the following to Subparagraph 10.8 and 10.9 to Article 10 Miscellaneous Provisions: 10.8 Consequential Damages. Notwithstanding any other provisions of the Agreement, neither party shall be liable to the other for any consequential damages incurred due to the fault of the other party, regardless of the nature of this fault or whether it was committed by the Client or the Design Professional, their employees, agents, subconsultants or subcontractors. Consequential damages include, but are not limited to, loss of use and loss of profit. 13.4 10.9 Betterment. If due to the Design Professional’s error, any required item or component of the project is omitted form the Design Professional’s construction documents, the Design Professional shall not be responsible for paying the cost to add such an item or component to the extent that such an item or component would have been otherwise necessary to the project or otherwise adds value or betterment to the project. In no event will the Design Professional be responsible for any cost or expense that provides betterment, upgrade or enhancement of the project. 42 of 83 AIA Document B107 – 2020. Copyright © 1996, 2010, and 2020. All rights reserved. “The American Institute of Architects,” “American Institute of Architects,” “AIA,” the AIA Logo, and “AIA Contract Documents” are trademarks of The American Institute of Architects. This draft was produced at 10:45:03 ET on 02/20/2023 under Order No.2114409534 which expires on 02/19/2024, is not for resale, is licensed for one-time use only, and may only be used in accordance with the AIA Contract Documents® Terms of Service. To report copyright violations, e-mail docinfo@aiacontracts.com. User Notes: (1248948602) 19 » » ARTICLE 14 SCOPE OF THE AGREEMENT § 14.1 This Agreement represents the entire and integrated agreement between the Developer and the Architect and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both Developer and Architect. § 14.2 This Agreement is comprised of the following documents identified below: .1 AIA Document B107™–2020, Standard Form Agreement Between Developer and Architect for Prototype(s) for a One or Two Family Residential Project with Limited Architectural Services .2 Exhibits: (Check the appropriate box for any Exhibits incorporated into this Agreement.) [ « X » ] Other Exhibits incorporated into this Agreement: (Clearly identify any other Exhibits incorporated into this Agreement, including any Exhibits and scopes of services identified as Exhibits in Section 4.1.2.) « Exhibit A – Project Development Outline Notes Exhibit B – Preliminary Project Schedule Exhibit C – Design Services Scope of Work Summary Exhibit D – Preliminary Plat Map Exhibit E – Schematic Site Plan Exhibit F – Schematic Floor Plans Exhibit G – City of Dalton Development Requirements» .3 Other documents: (List other documents, if any, forming part of the Agreement.) « » This Agreement entered into as of the day and year first written above. DEVELOPER (Signature) ARCHITECT (Signature) « »« » « »« » (Printed name and title) (Printed name, title, and license number, if required) 43 of 83 - • ([KLELW$ 1RUWK)LHOGVRI'DOWRQ±6HQLRU+RXVLQJ 'DOWRQ0LQQHVRWD 3URMHFW'HYHORSPHQW2XWOLQH1RWHV )HEUXDU\ , 3URMHFW%DFNJURXQG $ 7KH&LW\RI'DOWRQDFTXLUHGWKHPDQXIDFWXUHGKRPHSDUNLQZLWKILQDQFLDODVVLVWDQFHIURPWKH 2WWHU7DLO&RXQW\+5$7KH&LW\KROGVWKHWLWOHWRWKHSURSHUW\ % 7KHFLW\DSSURDFKHGWKH+5$DERXWDVVLVWDQFHZLWKWKHUHPRYDORIWKHPDQXIDFWXUHGKRPHVLQWKH PDQXIDFWXUHGKRPHSDUNLQDQGDJDLQLQ & $WWKHUHTXHVWRIWKH&LW\RI'DOWRQLQ-XO\WKH+5$%RDUGDGRSWHG5HVROXWLRQ1R± ³$XWKRUL]H'HPROLWLRQDQG6LWH&OHDUDQFH 3URYLGH5HGHYHORSPHQW$VVLVWDQFHWRWKH&LW\RI 'DOWRQ´ ³7KDWXSWRLVDXWKRUL]HGIRUGHPROLWLRQVLWHFOHDUDQFHDQGPLWLJDWLRQRI WKHUHPDLQLQJKRPHVRQWKH3URSHUW\ 7KDW+5$VWDIILVDXWKRUL]HGWRFRQWLQXHZRUNLQJZLWKWKHFLW\RQUHGHYHORSPHQW DVVLVWDQFHLQFOXGLQJPDUNHWDQDO\VLVEXLOGHULQWHUHVWDOWHUQDWLYHGHYHORSPHQW VFHQDULRVDQGSRWHQWLDOUHGHYHORSPHQWIXQGLQJVRXUFHV 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ĚƵƉůĞdžĞƐĂŶĚƚƌŝƉůĞdžĞƐƚŽƐƵŝƚƚŚĞŶĞĞĚƐŽĨƚŚĞƐƉĞĐŝĨŝĐĐŽŵŵƵŶŝƚŝĞƐƚŚĂƚƚŚĞ,Z ƐĞƌǀĞƐ͘ ď͘ƉƉůLJƚŚĞŝŶĨŽƌŵĂƚŝŽŶŐĂƚŚĞƌĞĚĂƚƚŚĞĂůƚŽŶĐŽŵŵƵŶŝƚLJůŝƐƚĞŶŝŶŐƐĞƐƐŝŽŶƚŽƌĞĨŝŶĞ ƚŚĞĨůŽŽƌƉůĂŶƐĨŽƌƚŚĞƵŶŝƚƐ Đ͘DĂdžŝŵŝnjĞůŝǀŝŶŐƐƉĂĐĞĞĨĨŝĐŝĞŶĐŝĞƐƚŽŵŝŶŝŵŝnjĞƐƋƵĂƌĞĨŽŽƚĂŐĞΘĐŽƐƚƐ͘ ͘/ŶƚĞƌŝŽƌĞƐŝŐŶ ϭ͘ZĞĨŝŶĞƚŚĞ,ZƐĐŚĞŵĂƚŝĐĚĞƐŝŐŶƉĞƌďƵŝůĚŝŶŐĐŽĚĞƐĂŶĚƐĞŶŝŽƌůŝǀŝŶŐƐƚĂŶĚĂƌĚƐ͘ Ϯ͘ŽŶƐŝĚĞƌƉĂƐƐŝǀĞƐŽůĂƌĚĞƐŝŐŶƚĂŬŝŶŐĂĚǀĂŶƚĂŐĞŽĨ^ŽƵƚŚĨĂĐŝŶŐĞŶƚƌŝĞƐ ϯ͘^ƉĞĐŝĨLJĚƵƌĂďůĞŵŝĚͲůĞǀĞůƋƵĂůŝƚLJŵĂƚĞƌŝĂůƐ ϰ͘EŽďŝͲĨŽůĚĚŽŽƌƐ͕ŶŽĐĂƌƉĞƚ͕ƵƐĞƚŚĞƐĂŵĞĨůŽŽƌŝŶŐƚŚƌŽƵŐŚŽƵƚĞŶƚŝƌĞƵŶŝƚ ϱ͘hƐĞĞĂƐLJƚŽŽƉĞƌĂƚĞĚŽŽƌĂŶĚĐĂďŝŶĞƚŚĂƌĚǁĂƌĞ͘^ƉĞĐŚĞĂǀLJĚƵƚLJŚŝŶŐĞƐĂŶĚĚƌĂǁĞƌ ŐůŝĚĞƐ ϲ͘hƐĞŶĂƚƵƌĂůůŝŐŚƚŝŶŐǁŚĞƌĞƉŽƐƐŝďůĞ ϳ͘WƌŽǀŝĚĞĨůŽŽƌƉůĂŶ͕ĚŽŽƌƐĐŚĞĚƵůĞ͕ĨŝŶŝƐŚƐĐŚĞĚƵůĞ͕ĨŽƵŶĚĂƚŝŽŶƉůĂŶ͕ĨƌĂŵŝŶŐƉůĂŶƐ͕ĂŶĚ ĂƌĐŚŝƚĞĐƚƵƌĂůƐƉĞĐŝĨŝĐĂƚŝŽŶƐ ϴ͘WůĂŶĂŶĚůĞĂĚǀŝƌƚƵĂůƉƌŽũĞĐƚĚĞǀĞůŽƉŵĞŶƚŵĞĞƚŝŶŐƐĂƐŶĞĞĚĞĚ͘ ͘ džƚĞƌŝŽƌĞƐŝŐŶ ϭ͘^ƉĞĐŝĨLJĚƵƌĂďůĞ͕ŵŝĚͲůĞǀĞůŵĂƚĞƌŝĂůƐ͘ϰϬͲLJĞĂƌƐŚŝŶŐůĞƐ͘>ŽǁŽƌŶŽŵĂŝŶƚĞŶĂŶĐĞĞdžƚĞƌŝŽƌ ĨŝŶŝƐŚĞƐ Ϯ͘hƐĞƐŝŵƉůĞƌŽŽĨůŝŶĞƐƚŽƌĞĚƵĐĞĨƌĂŵŝŶŐĐŽƐƚƐ ϯ͘ ŵƉůŽLJŽǀĞƌŚĂŶŐŝŶŐĞĂǀĞƐƚŽƌĞĚƵĐĞŝĐĞĚĂŵŝƐƐƵĞƐ ϰ͘ǀŽŝĚƐůŝĚŝŶŐĞdžƚĞƌŝŽƌĚŽŽƌƐ EXHIBIT C utility 48 of 83 ϱ͘^ƉĞĐ͘ƵƉƉĞƌͲŵŝĚůĞǀĞůĐƌĂŶŬͲŽƵƚĐĂƐĞŵĞŶƚǁŝŶĚŽǁƐ;ƐĞŶŝŽƌƵƐĞƌĨƌŝĞŶĚůLJͿ ϲ͘WƌŽǀŝĚĞĨŽƵƌĞdžƚĞƌŝŽƌĞůĞǀĂƚŝŽŶĚƌĂǁŝŶŐƐ ///͘DĞĐŚĂŶŝĐĂů͗ ͘,sͬWůƵŵďŝŶŐ ϭ͘tŽƌŬǁŝƚŚKƚƚĞƌdĂŝůWŽǁĞƌ͕ŵĞĐŚĂŶŝĐĂůĐŽŶƚƌĂĐƚŽƌ͕ĂŶĚĞůĞĐƚƌŝĐĂůĐŽŶƚƌĂĐƚŽƌŽŶ ŝŶƚĞŐƌĂƚĞĚĚĞƐŝŐŶĂƉƉƌŽĂĐŚ͘ Ϯ͘ŽŽƌĚŝŶĂƚĞƐƵďŵŝƚƚĂůŽĨƌĞƋƵŝƌĞĚĚƌĂǁŝŶŐƐƚŽƚŚĞ^ƚĂƚĞ͘ ϯ͘>ĂLJŽƵƚĞƋƵŝƉŵĞŶƚƌŽŽŵƐĨŽƌĂĐĐĞƐƐƚŚƌƵƚŚĞŐĂƌĂŐĞǁŝƚŚŽƵƚĞŶƚĞƌŝŶŐƚŚĞƵŶŝƚƐ͛ůŝǀŝŶŐƐƉĂĐĞ /s͘ ůĞĐƚƌŝĐĂů ͘'ĞŶĞƌĂů ůĞĐƚƌŝĐĂůZĞƋƵŝƌĞŵĞŶƚƐ ϭ͘tŽƌŬǁŝƚŚKƚƚĞƌdĂŝůWŽǁĞƌ͕ĞůĞĐƚƌŝĐĂůĐŽŶƚƌĂĐƚŽƌ͕ĂŶĚŵĞĐŚĂŶŝĐĂůĐŽŶƚƌĂĐƚŽƌŽŶ ŝŶƚĞŐƌĂƚĞĚĚĞƐŝŐŶĂƉƉƌŽĂĐŚ͘ 49 of 83 LOCATION OF NORTH FIELDSHOUSING DEVELOPMENT EXHIBIT D 50 of 83 PRELIMINARY PLAT OF PAAT ~TtiE SE1/4 OF THE NEl14 S~JON\l,T,13-IN .. fl.4ZW P,t.D. 5000011'110Gl:10$ omR TAILCOUNTY.MINN~A Olti(Jf; 111:XKJ r flllOOIIUS .IIO' L~ m ---------------------------------. 160.00 --------------1 LEGEND . 0 = = /Ill '"""'""' lffA!MACIJ).1710o """'""'""' """""""""""""' """""''"" ................ -'""""" ~DAflEA ASf'tiAl,TSURFACE" aw,m....,-.-.c1 ....,_D""'°"""' 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QSF .,, . ., • s.r Jo.J7J SJ ;,c,f..12 Sf. uus.r. 11.197 SI. -- ,...,s; ,unu. •-1ar, --O'fTO#IW.!Oot 51 of 83 Otter Tail County Web Map EXHIBIT E https://ottertailcountymn.us/ I I I \ \ \ \ \ t : 44 Panel -, 15 •w Array 129.lils~ I ~1: 908.68s1 -444.37st ~ N ~ Impervious Surfaces: • : ·~ • 269'-1 1 112· Buildings -7308 sf -----i Drives • 2706 sf Walks • 760 sf iu ]i? l Patios -600 sf &1~ .. ~i::;;i ( Total 11374 Sf= 34% OTTER TAIL COUNTY· HRA DALTON DEVELOPMENT Two, Three-Unit Townhomes November 4, 2022 HALLWAY3'-6" WIDEADDEDCOATCLOSETADDEDCOATCLOSETPROPOSED DALTON NORTH FIELDS APARTMENTSTWO EACH 3-UNIT BUILDINGS11/29/22 REVISIONSOTTER TAIL COUNTY HRAADDEDPANTRY &BATHROOMSTORAGEADDED MECHROOMSYYYYYYYYYEXHIBIT F 52 of 83 Bed 2 Bed 1 , ' l J X 13 Dining 10 • 7 X 8 Dining Id § ! 9 Garage Garnge pi. : ,. Q Living 1s'x1s Bed 2 Bed 1 11'x 13' Dining Garage 9/2/2021 NORTH FIELDS OF DALTON DEVELOPMENT REQUIREMENTS PURPOSE The purpose of these requirements is to establish minimum standards for development to 1) protect the health and safety of new residents and existing residents nearby, 2) create a cohesive residential living environment, 3) offer a variety of housing options, and 4) create new investment into the community to add to the enjoyment of living in this unique area of Dalton. EILIGIBLE USES Residential structures, owner occupied and rental, are permitted including: 1. Single family detached structures. 2. Duplexes. 3. Triplexes. 4. Fourplexes. 5. Any other structures must be approved by the Planning Commission and City Council. PROHIBITED USES The following uses are prohibited: 1. Recreational vehicles and/or campers used as primary residence or storage. 2. Outdoor wood boilers. 3. Rental structures containing five units, or more are not permitted. LOT REQUIREMENTS 1. A residential structure must be built first on the lot prior to any accessory structures including storage buildings or any other non-residential structure. 2. Driveways must be paved or have a hard surface, including but not limited to asphalt, concrete, or pavers. 3. Each structure shall maintain a 35 foot front yard setback from the right of way line of the adjacent street as established on the proposed plat, North Fields of Dalton. The front setback is that area between the right of way line and the EXHIBIT G 53 of 83 9/2/2021 front of the home, except where on a corner lot, the shorter lot line dimension shall be considered the front of the structure. The front yard setback shall be clear of all structures, accessory, principal, or any intrusion that would impede access for installation or maintenance of utilities. 4. Each structure shall maintain a 10 foot side yard clear of all structures, accessory, principal, or any intrusion that would impede access for installation or maintenance of utilities. 5. Each structure shall maintain a 15 foot rear setback and shall be clear of all structures, accessory, principal, or any intrusion that would impede access for installation or maintenance of utilities. 6. Lot owners are responsible to ensure that stormwater runoff from building and paved areas should not adversely affect neighboring properties. 7. The total impervious surface on a lot shall not exceed 40%. An impervious surface includes structures and hard surfaces. HOUSE DESIGN 1. The Dalton area has a high water table. It is likely that a basement will not be possible. Crawl spaces may be possible but should be closely evaluated. 2. Structures must be on a permanent foundation that is constructed of durable materials (i.e. concrete, mortared masonry or treated wood). 3. A maximum height of two stories is permitted. 4. Living space within each structure shall be no less than 1,200 square feet. 5. Structures (excluding garage space) must be at minimum 30 feet in width. 6. Roof pitch must be 5/12ths or steeper. 7. A front porch is encouraged. 8. Detached accessory structures must match the single-family home in color and general design. No more than one utility shed less than 120 square feet is permitted. UTILITIES 1. Connections to city sewer and water are required and must meet City of Dalton specifications. 2. Electricity is serviced by Otter Tail Power Company. 54 of 83 9/2/2021 3. Because there is no natural gas line in town, residents will need to acquire their own services. 4. Internet connections are available to each lot. Satellite service is another viable option. PROCESS 1. A permit must be approved by the City Council before any site or building work on the lot. 2. The permit process is as follows: a. An application for the permit must be obtained from the City Clerk. b. The completed application, required plans and permit fee must be submitted three weeks in advance of the Council meeting at which it will be considered. c. After City Council action, a letter confirming the Council’s decision will be sent to the person making the application and will identify any stipulations> 3. The permit application package must include the following: a. Completed application form signed by the owner or potential owner of the property. b. Building plans including: i. Floor plan of each story. ii. Exterior building elevation identifying exterior colors and materials. iii. Estimated finished floor elevation at the front door. iv. Identification of specifications that are not in conformance with the standards contained herein. c. Lot plan showing dimensions of building(s) and distances to lot lines. d. Application fee of $200. 55 of 83 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 5. NEW BUSINESS 56 of 83 !!) EOU/\L HOUSING OPPORTUNITY OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION _April 18, 2023__ BOARD MEETING DATE AGENDA ITEM #5A Administration ORIGINATING DEPARTMENT/SERVICE Barbara Dacy 4/12/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 236 Adopting Capital Assets, Capitalization & Disposition of Assets Policy PROPOSED REQUEST/JUSTIFICATION The proposed capital asset policy establishes the basic accounting procedures for the Authority and complies with the policy guidance from HUD. Where appropriate, language mirrors county practice. Capital assets are in general defined as those having a cots of greater that $5,000 and a useful life 3 years or more. Specific capitalization policies are proposed for land and buildings, building improvements, equipment, supplies and personal property. The purpose of the capitalization is to record a cost or expense on the balance sheet for the purposes of delaying full recognition of the expense. The $5,000 threshold is recommended by HUD guidance. A depreciation schedule is also included which is based on Generally Accepted Accounting Principles. The policy also contains procedures regarding “construction in process”, which will pertain to new affordable housing construction or significant rehabilitation projects completed by the HRA. Finally, procedures are proposed for acquisition and disposition of HRA assets, other than real estate (the Board adopted a policy regarding property acquisition and sale in 2022). Staff recommends the Board approved Resolution No. 236. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 4/12/2023 ATTACHMENT LIST: FINANCIAL IMPLICATIONS: NA BUDGETED: YES NO FUNDING: NA COMMENTS 57 of 83 RESOLUTION NO. 236 ADOPTING THE CAPITAL ASSET, CAPITALIZATION AND DISPOSITION OF ASSETS POLICY WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) is empowered to acquire and dispose of a variety of capital assets by Minnesota Statute; and WHEREAS, the Authority has determined it prudent to adopt a policy guiding the tracking, capitalization, and disposition of capital assets; and WHEREAS, the Authority has determined that the provisions contained in the Capital Asset, Capitalization and Disposition of Assets Policy (the “Policy”) as represented in Exhibit A are necessary and appropriate. NOW, THEREFORE, IT IS HEREBY RESOLVED: 1.That the Policy represented in Exhibit A is hereby adopted. 2.That the Executive Director is authorized, empowered, and directed to undertake any other tasks as she deems necessary or desirable in her discretion to effectuate the purposes of the foregoing Resolution. Upon the motion of _____________, seconded by _____________, and passed on a ________ vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 18th day of April 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 58 of 83 EXHIBIT A TO RESOLUTION NO. 236 CAPITAL ASSETS, CAPITALIZATION & DISPOSITION OF ASSETS POLICY I.CAPITAL ASSETS A.APPLICABILITY Capital assets are assets where the cost and other criteria meet the Housing and Redevelopment Authority (HRA) established capitalization policy. The HRA shall own all property purchased with HRA funds and all property received as gifts or donations. The HRA shall exercise responsibility of ownership for such property. HRA assets should only be used to conduct official HRA operations. Use of HRA equipment for personal use is strictly prohibited. This policy applies to all HRA programs, including federal and non-federal programs. Programs that are managed by a third-party entity where the partnership agreements, regulatory agreements, and/or financial agreements may have their own capital asset policy are the exceptions to this policy. B.CAPITAL ASSET PROCEDURES 1.Tracking of Capitalized and Non-Capitalized Assets Upon receipt of the purchase order, shipping records, invoices, and/or other appropriate documentation, the Finance Office will enter the information into the capital assets software system. The software system will track the following information for each capitalized asset. 1.Item name and description 2.Serial number 3.Source of funding (including the Federal Award Identification Number (FAIN) 4.Percentage of Federal participation in the project costs for the federal award under which the property was acquired 5.Condition of the property 6.Title holder 7.Purchase date and vendor 59 of 83 218-998-8730 ottertailcounty.gov OTTER TAIL COUNTY I HOUSING Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 ii) EOU/\L HOUSING OPPORTUNITY hra@co.ottertail.mn.us 2 8.Purchase amount 9.Warranty information (if applicable) 10.Location of asset 11.Disposition data, including the date of disposal and sale price of the property The Finance Office will also maintain a list for all non-capitalized assets in the software system. This list will include similar information as tracked for each capitalized asset in the capital assets module. A Tangible Personal Property Report should include any required forms by the Department of Housing & Urban Development (HUD) and kept on file. For those items that are required to be tracked, the Finance Office will create the inventory tag number (tag) and provide the tag to the Project Manager. The Project Manager is responsible for ensuring that the item is properly tagged. For those systems that can store photographs, the Project Manager will be responsible for photographing the item and attaching the photograph in the system. Transfers of assets will be accomplished through approval of the Executive Director, or the individual identified as the designee by HRA Board Resolution. Once the item is approved and transferred, the Finance Office will be notified. The Finance Office will update the item in the HRA’s software system. 2.Conducting an Annual Inventory Annual inventories of capitalized and non-capitalized assets (excluding appliances) are to be completed and turned into the Finance Office on an annual basis and reconciled with the property records. The serial number and location of each appliance will be confirmed on an ongoing basis by the Project Manager as part of the annual inspection process with an inventory report prepared and submitted to the Finance Office. Capitalized or non-capitalized assets that cannot be located will be reported to the Executive Director for further investigation. Disposition of equipment and the method used to dispose of the item will be included in the report. Annual inventory lists will be provided by the Project Manager and submitted to the Finance Office by project and/or program. 60 of 83 3 II.CAPITALIZATION A. CAPITALIZATION THRESHOLDS This section of the policy establishes the capitalization criteria, including the capitalization threshold to distinguish and record certain transactions as a capital asset or as an expense. The following items must be capitalized (i.e., recorded as a capital asset on the HRA accounting records). 1. Land and Building Acquisitions – All land and building acquisitions are to becapitalized regardless of amount. 2. Equipment – Tangible personal property, including information technology systems, with a value of $5,000 or more, which is not physically attached to the HRA’sbuilding structures, and the anticipated life or useful value of the equipment isanticipated to be more than three years are to be recorded as a capital asset.3. Building Improvement and Modernization – Modernization and renovation efforts of the HRA’s buildings, systems and infrastructure, such as parking lots or boiler systems with a value of $5,000 or more and it is anticipated that the life of the item isextended by three years or more should be recorded as a capital asset.4.Capital Leases – Capital leases are those in which the HRA is either leasing topurchase or leasing for the life of the asset. All leases of fixed assets must be differentiated between a regular operating lease and a capital lease. Assets acquired through a capital lease that meet the threshold for capitalization are to be capitalizedand tracked as a capital asset.5. Supplies – Supplies are non-capital assets and are tangible personal property otherthan those described in the definition of equipment above, and the acquisition cost is less than $5,000, regardless of the length of its useful life. 6. Personal Property – Personal property means property other than real property. Itmay be tangible, having physical existence, or intangible, and for the purposes of thispolicy, may be a capital or non-capital asset as defined above. For purposes of the capitalization policy, appliances are always categorized as non- capitalized assets. The cost of an asset shall be defined using generally accepted accounting principles (GAAP). Assets that have been donated or transferred from another government will be recorded at fair value at the time of donation or transfer. 61 of 83 4 B.ACQUISITION PROCEDURES FOR CAPITAL AND NON-CAPITAL ASSETS All capital assets will need to be approved in the HRA annual budget, the Public Housing Capital Fund Program Five Year Plan prior to purchase, and/or approved by the Board of Commissioners as other policies dictate. The capitalization procedures to be used are as follows: 1. Review the operating budgets to verify that the cost of the asset has been approved bythe Board.2. The procurement policy will be used to determine the method of how the capitalizedand non-capitalized asset will need to be purchased (e.g., small purchase method, sealed bid, etc.). 3. Once the item is received and supporting cost material has been provided, theExecutive Director, or other individual that is designated by the Executive Director,will determine based on a review of the capitalization policy, if the item is classifiedas a capital asset or a non-capitalized asset. 4.Once the capital or non-capitalized asset is received, the item will be tracked in accordance with the HRA’s capital assets policy. C. ACCOUNTING PROCEDURES FOR CAPITAL AND NON-CAPITAL ASSETS Generally accepted accounting principles (GAAP) will be used to determine the actual cost of the acquired capital and non-capital asset. 1.Capitalized Assets. Below are the accounting procedures for capitalized assets. a.In accordance with the capitalization policy, land, buildings, improvements, and equipment that meet the capitalization policy criteria are to be recorded ascapitalized assets.b.These capitalized assets will be tracked on a depreciation list (refer to section B.1.for tracking and control requirements) and depreciated according to Section E. c. Depreciation costs will be based on the straight-line depreciation method (i.e., costs are depreciated evenly over the estimated useful life of the asset) and willbegin the first of the month following the date the asset was purchased.d.All capital assets and related depreciation will be reconciled to the general ledger. 2.Non-Capitalized Assets. Below are the accounting procedures for non-capitalized assets. a.For improvements and equipment that do not meet the capitalization criteria, thecosts will be expensed to the appropriate budget/account line item. b.Refer to section B.1. for tracking and control requirements. 62 of 83 5 D. ACCOUNTING PROCEDURES FOR CONSTRUCTION IN PROGRESS Construction projects, defined as having a total cost in excess of $50,000, shall be considered as “construction in progress” for the purposes of accounting procedures. Below are the accounting procedures for construction in progress. 1. The amounts spent on the project will be debited to a long-term asset account categorized as “Construction Work in Progress”.2. Construction Work-in-Progress will be reported within the balancesheet classification as “Building Improvement – New Construction”.3.There is no depreciation of the accumulated costs until the project is completed and the building is placed into service. 4.When the completed asset is placed into service, the project's accumulated costs willbe removed from the Construction Work-in-Progress account and will be debited tothe appropriate asset account. Capitalized Interest. Capitalized interest is the interest on debt that was used to finance a self-constructed, long-term asset. The capitalized interest for a self-constructed asset involves the following: 1. The cumulative amount of expenditures during the asset's construction. 2. The interest on the debt related to the asset's construction. 3.Adding the capitalized interest to the asset's cost instead of reporting it as interestexpense of the current accounting period.4.The capitalized interest will be depreciated over the asset's useful life as part of theasset's cost. E.DEPRECIATION SCHEDULE FOR CAPITAL ASSETS Capital assets shall be depreciated using the Straight-Line Method of Depreciation with no salvage value. Depreciation will begin the 1st of the month following the month of purchase. The depreciation schedule below should be used determining the useful life of capital assets. The HRA will abide by the “Generally Accepted Accounting Principles” (GAAP) Flyer #2 (June 1999) and subsequent amendments when determining the depreciation schedule. 63 of 83 6 DEPRECIATION SCHEDULE Item Suggested Life Buildings 20 to 40 years Building improvements 10 to 40 years Furniture and fixtures 5 to 10 years Equipment 3 to 10 years Telephones 5 years Tools 5 years Appliances 7 years Furniture 10 years Computers 3 years Roofs 10 years Leasehold Improvements 15 years or life of the lease Land & permanent improvements none III.DISPOSITION OF ASSETS POLICY A.APPLICABILITY This policy applies to HRA property (other than land and buildings) purchased with HRA funds, that has become worn, damaged beyond economical repair, or is obsolete (i.e., no longer useful for the original purpose or that has no use), shall be disposed of in accordance with the HRA’s disposition policy. The HRA considers HRA property to be vehicles, maintenance and office equipment, supplies, computers, and computer-related items, appliances, or any other items purchased to meet the goals and objectives of the agency. Property purchased with HRA funds shall not be sold without prior Board approval and at less than the fair value of the asset. For items sold, payment can be received in the form of a money order, cashier, or personal check that is made payable to the housing authority. Cash is prohibited as a method of payment. Once HRA property has been sold or otherwise disposed of, it should be removed from the fixed asset list. Employees and their family, Board members and their family, and friends of employees are not eligible for the purchase of surplus HRA property. Furthermore, no property shall be donated to an employee or Board Commissioner or relative of an employee or Board 64 of 83 7 commissioner. HRA employees and Board members who are found in violation of this provision in the disposition policy may be subject to disciplinary action, including dismissal from the HRA or removal from the Board. B.DISPOSITION PROCEDURES 1.Procedures for Determination of Items to be Disposed The Executive Director, Project Manager, or other individual that is designated by the Executive Director will oversee the determination of whether HRA property is considered worn, damaged beyond economical repair, or is obsolete. 1. The HRA shall conduct a survey once a year, prior to or in conjunction with the annual HRA inventory to identify HRA property that is considered worn, damaged beyond economical repair, or is obsolete. 2.Each item that is to be disposed of shall be identified by serial number and classified as: 1) without value, to be discarded as obsolete; 2) with salvage value, to be stripped of usable parts before discarding, or 3) with value, to be sold or used as a trade-in on a new item. 3. If the item is determined to be without value or having salvage value only, it shall be stripped of any usable parts and the remainder discarded in accordance with all applicable state and local regulations and/or codes. 2.Disposition Procedures 1.The Executive Director or designee will determine the estimated fair market value of each item and place those items for sale based on the procedures outlined below. a. Items with Estimated Fair Market Value of Less Than $100. The Executive Director or designee may solicit informal bids in the open market. b. Items with Estimated Fair Market Value of $100 to $5,000. The Executive Director or designee shall solicit informal bids orally, by electronic mail, telephone, or in writing from all known prospective purchasers. A tabulation of all such bids received shall be prepared and submitted with the board resolution. Items of equipment with a current per unit fair market value of less than $5,000 may be retained, sold or otherwise disposed of with no further obligation to the Department of Housing and Urban Development (HUD). The Executive Director can transfer the proceeds of the disposition of the equipment to a business activity or the general fund. c.Items with Estimated Fair Market Value of More than $5,000. The Executive Director or designee shall advertise for formal bids prior to awarding a contract of sale. The advertisement shall be posted at least fifteen (15) days prior to award of the sale 65 of 83 8 contract and shall be published in newspapers or circular letters to all prospective purchasers. In addition, notices shall be posted in public places. Bids shall be opened publicly at the time and place specified in the advertisement. A tabulation of all bids received shall be prepared and submitted with the board resolution and filed with the contract as part of the permanent record. The HRA is required by 2 CFR 200.313 to compensate HUD for its interest in the equipment. HUD will be due an amount calculated by multiplying the current market value of proceeds from the sale of the equipment by the Federal award agency’s percentage of participation in the cost of the original purchase. If the equipment is sold, HUD may permit the HRA to deduct and retain from HUD’s share $500 or ten percent of the proceeds, whichever is less, for its selling and handling expenses. 2. A board resolution requesting Board approval for the disposition shall be prepared and include the following information organized by the project or program from which the item was originally purchased. a.Method of disposition of each item: i.donated to non-profit; ii.discarded without value; iii.salvage value (e.g., old appliances); and iv.with fair market value. b.Estimated fair market value of each item. c.Information obtained to support fair market value estimate. d.Total estimated value for all items to be disposed. 3. The Executive Director or designee will check for an approved board resolution and evidence of documentation of fair value before the assets are disposed. 4.After the items have been sold, donated, or disposed, a receipt along with the payment (as applicable), should be immediately provided to the Finance Office. 5. The Finance office will review the receipt against the approved Board resolution for the item and quantity disposed and amount of the sale. 6.Finance will credit the revenue from the sale of these items to the appropriate project, program, or department from which the item(s) was originally purchased. 7.Finance will remove from the fixed asset list those items that have been disposed. 66 of 83 9 3. Sale/Donation of HRA Property to Non-Profit Organization The sale or donation of HRA property to a public body for public use or a non-profit organization for low-income housing related purposes may be negotiated at its fair market value subject to approval by the Board of Commissioners. The transfer shall be documented by a bill of sale. C. ACCOUNTING PROCEDURES FOR DISPOSAL/WRITE-OFFS OF PROPERTY &EQUIPMENT 1.Disposal Process. The Executive Director will recommend the disposal of all capitalized fixed assets that may be worn-out or obsolete. a.Property that is discovered to be missing or stolen will be reported immediately to theExecutive Director. If not located, this property will be written off the books whenauthorized by the HRA Board. b. The HRA Board approves the write-off/disposal of the assets from the general ledger. 2.Impairment Losses. The HRA will recognize an impairment loss in the statement ofactivities with respect to any property and equipment whose carrying amount (net bookvalue) possesses both of the following characteristics: o The amount is not recoverable and o The amount exceeds fair value. a.If only one of the preceding characteristics is present, an impairment loss will not berecorded. b. In determining whether a carrying amount is recoverable, all future cash inflows shall beconsidered, including cash flows from operations attributable to the asset, as well as cashflows from the sale of the asset.c. In cases in which no cash flows are directly attributable to an asset, the first characteristicis considered to have been met, and the determination of whether an impairment loss has been incurred will be based on the fair market value criterion.d.Impairments are distinguishable from changes in estimates resulting from a determinationthat a depreciable asset will be useful for a shorter period of time than the originalestimate (changes in estimated useful lives were explained earlier). When an impairmentloss is incurred, the loss is recognized in the statement of activities in the period of the loss and the carrying amount of the long-lived asset is adjusted downward to the revisedamount. If the asset is a depreciable asset, this lesser amount shall then be used forpurposes of calculating future depreciation or amortization expense. 67 of 83 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION _April 18, 2022__ BOARD MEETING DATE AGENDA ITEM #5B Community Assistance ORIGINATING DEPARTMENT/SERVICE Tanya Westra 04/12/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 237 Resolution Authorizing Execution of Change Order for Hidden Meadows Bid Alternate #1 PROPOSED REQUEST/JUSTIFICATION The Otter Tail County HRA was awarded funds from Minnesota Housing Finance Agency to financially aid in the construction of up to three homes within the Hidden Meadows Development located in Battle Lake. Construction of Phase 1 (one 3 bedroom and one 2 bedroom) has already begun. The Otter Tail County HRA has executed Purchase Agreements for both homes. Anticipated Closing Dates 113 Hidden Meadows Drive May 15, 2023 111 Hidden Meadows Drive June 20, 2023 Immediately after funds have been received from the sale proceeds and the Value Gap Grant from MHFA, those funds will be used to repay the principal balance on the Interim Loan Fund to reduce the overall interest payments on this loan. Authorizing the start of Phase 2 construction, the third home (2 bedroom), is now appropriate. The original bid documents required the identification of the cost of the third home, identified as “bid alternate #1”. High Pointe homes identified $323,200 as the construction cost of the third home. After review of financials, both projected and actual for all three homes, it is estimated that the complete project cost will be at or slightly less than originally anticipated in the grant application to MHFA. It appears that sufficient funds will be available for all three homes. Staff recommends that the Board adopt the attached resolution authorizing the approval of Bid Alternate #1 to begin the construction of the second 2-bedroom home. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 04/12/2023 ATTACHMENT LIST: Hidden Meadows Projected Financial Report FINANCIAL IMPLICATIONS: None BUDGETED: X YES NO FUNDING: MHFA- Interim Loan & Value Gap Grant COMMENTS 68 of 83 Hidden Meadows Projected Financial Report 113 Hidden Meadows – 3 Bedroom Under Construction 111 Hidden Meadows – 2 Bedroom Under Construction Projected/ Actual Estimated at Application $386,100 Construction $365,000 $507 Utility Costs $3,400 Interim Loan Interest $15,500 $9,644 Land Cost $9,644 $500 Appraisal $500 $900 HERS Rating $1,500 $841 Insurance $14,401 Sales Expenses $15,000 Contingency $10,000 $416,293 TOTAL COSTS $417,144 $40,150 Developer Fee $40,150 $456,443 TOTAL DEVELOPMENT $459,294 $456,443 Total Dev. Cost - $259,000 Sale Price $198,000 Value Gap Projected/ Actual Estimated at Application $306,230 Construction $305,000 $507 Utility Costs $2,400 Interim Loan Interest $13,500 $9,644 Land Cost $9,644 $500 Appraisal $500 $900 HERS Rater $1,500 $841 Insurance $13,533 Sales Expense $14,500 Contingency $10,000 $334,555 TOTAL COSTS $354,644 $33,000 Developer Fee $35,000 $367,555 TOTAL DEVELOPMENT $389,644 $367,555 Total Dev. Cost - $239,900 Sale Price $127,655 Value Gap 69 of 83 (!) EOU/\L HOUSING OPPORTUNITY 109 Hidden Meadows – 2 Bedroom $516,582 Value Gap Grant Awarded by MHFA - $198,000 Value Gap needed for 113 Hidden Meadows Drive - $127,655 Value Gap needed for 111 Hidden Meadows Drive - $146,225 Projected Value Gap for 109 Hidden Meadows Drive $ 44,702 Unused Value Gap $386,125 Total Dev. Cost - $239,900 Sale Price $146,225 Value Gap Projected Estimated at Application $323,200 Construction $305,000 $507 Utility Costs $2,000 Interim Loan Interest $13,500 $9,644 Land Cost $9,644 $500 Appraisal $500 $900 HERS Rater $1,500 $841 Insurance $13,533 Sales Expense $14,500 Contingency $10,000 $351,125 TOTAL COSTS $354,644 $35,000 Developer Fee $35,000 $386,125 TOTAL DEVELOPMENT $389,644 70 of 83 RESOLUTION NO. 237 RESOLUTION AUTHORIZING EXECUTION OF CHANGE ORDER FOR HIDDEN MEADOWS BID ALTERNATE #1 WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) received a request from the City of Battle Lake Economic Development Authority (the “City EDA”) and the City of Battle Lake (the “City”) in 2020 to assist in the preparation of an application to the Minnesota Housing Finance Agency (the “State Housing Finance Agency”) “Community Impact Fund” programs to spark new development in the Hidden Meadows subdivision; and WHEREAS, the application was awarded and the Authority authorized execution of the Grant Agreement and Interim Loan Financing Agreement (the “Agreements”) with the State on March 17, 2022 for the construction of three single family homes in the Hidden Meadows subdivision (the “Project”); and WHEREAS, the Authority staff solicited bids by advertisements for the Project on August 27, 2022 and September 3, 2022, posted the Bid Documents (the “Documents”) to the website on August 29, 2022; and WHEREAS, on September 22, 2022, the Authority approved Resolution No. 206 awarding the bid for the Project and authorizing execution of a Construction Contract (the “Contract”) to HighPoint Homes (the “Builder”); and WHEREAS, the Project was divided into two phases of one three bedroom home and one two bedroom home in Phase 1 and one two bedroom home in Phase 2; and WHEREAS, the Authority has executed Purchase Agreements for both homes in Phase 1; and WHEREAS, the Documents and the Contract included a planned change order (the “Bid Alternate #1) for the construction of the home in Phase 2; and WHEREAS, the Builder proposed $323,200 for construction of the home in Phase 2 on the bid form; and WHEREAS, the Builder has the capacity to construct the third home in Phase 2 with completion before December 10, 2023; and WHEREAS, there is sufficient funding from the State Housing Finance Agency “Value Gap Grant” program. NOW, THEREFORE, IT IS HEREBY RESOLVED: 71 of 83 1. That the Executive Director is hereby authorized to execute the change order with HighPoint Homes for Bid Alternate #1. Upon the motion of _______________, seconded by _________________, and passed on a ___________________ vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 18th day of April, 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 72 of 83 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 6. DISCUSSSION 73 of 83 !!) EOU/\L HOUSING OPPORTUNITY MEMO TO: Otter Tail County HRA Board of Commissioners Wayne Johnson, Chairperson Lee Rogness, Vice Chairperson Kurt Mortenson, Secretary Betty Murphy, Commissioner Jeff Ackerson, Commissioner DATE: April 13, 2023 FROM: Barbara Dacy, Executive Director RE: #6 Discussion Items A. North Fields of Dalton Project Update Staff has completed much of the pre-development work for the construction of two triplexes in the City of Dalton. The next steps include concluding the integrated design team process with Otter Tail Power, procurement planning for construction, evaluation of financing options, and approval of the Development and Purchase Agreement with the City of Dalton. At the meeting, staff will present the current status of each of these steps and the preliminary project schedule. Upon the advice of the Architect, it was determined that it would not be prudent to install a ground source heat pump. This would be a consideration for future projects if site conditions are appropriate and the federally authorized rebates are available. We will continue to evaluate the solar option; however, grant funding would be necessary to make this viable. Of importance will be a discussion regarding using a competitive proposal process with contractors for several reasons. The Construction Consultant, Kevin Currie, is recommending the Competitive Proposal procurement method as detailed in Attachment A to this memo. Also attached is an excerpt of the existing Procurement Policy pertaining to this topic. B. MN Nahro Commissioner Training The Chair advised me that time permitting, he would like to discuss specific issues that were raised during the first virtual commissioner training, “The Role of the Commissioner in the HRA’s Success”. The next training is scheduled for May 31, 2023, regarding the “The Role of the Commissioner in Agency Policies & Performance”. 74 of 83 tit EOUJ\L HOUSING OPPORTUNITY Dalton North Fields Development Construction Services Procurement Plan Summary Intent: The intended procurement method for construction services on the Dalton North Fields project is “Competitive Proposals”. The OTCHRA would solicit separate proposals for general, mechanical, and electrical scopes of work. The OTCHRA would then execute separate prime contracts with each of the three selected contractors from the groups that submitted proposals. Please note, if funds are secured for a PV system (solar), then the HRA would solicit proposals and execute a contract with a PV systems contractor. Rationale: 1. The project conditions are not appropriate for sealed bids. Contractors involved in residential construction have little to no experience with the public sealed bid process and are prone not to pursue projects using the process. This was evidenced with the Hidden Meadows project, where even after significant pre-bid contractor solicitation, only one bid was received. 2. The cost to prepare documents for sealed bids for this project is not the best use of resources. Although relatively simple, the time and funds required to prepare bid documents ensuring that every detail of the two triplexes is spelled out for the bidders is not justified especially considering the overall cost of the project. 3. The competitive proposals approach allows for “integrated design”. Otter Tail Power has accepted the project into their “Integrated Building Design Plus” program. This program is structured to have all project stakeholders involved early in the project design process. The goal is to optimize the design with the goal of maximizing energy efficiency for the lifetime of the buildings. Otter Tail Power provides a consulting engineer at no cost to the OTCHRA to assist in the design process. 4. Contractor feedback on the project costs during design provides for more accurate project budgets. The project team will be considering several options (heating & cooling systems, electrical systems, etc…) during the design process. The competitive proposals process will allow for input from the contactors early enough in the design process so that decisions on project options under consideration can be made using real-time, market-derived pricing from those contractors. Process: 1. Contract with design services for design development. The HRA has finalized this contract, pending Board approval. This step allows for the production of project documents that are complete to the extent that the RFP’s sent to the contractors have accurate, relevant information about the project with which to respond to the RFPs. 2. Engage Otter Tail Power in the Integrated Building Design Plus program. The HRA has applied for and been accepted into this program. Initial meetings will begin once the design contract has been executed. 3. Work through the design development process with the architect and mechanical and electrical engineers and Otter Tail Power. Refine the floors plans previously development by the HRA, confirming all codes have been met and community input incorporated where feasible. Discuss and establish options for heating and cooling systems, and electrical systems including options for PV arrays and whole-house battery back-up systems. 75 of 83 4. Prepare RFPs for contractors using the competitive proposals process. Establish proposal evaluation criteria prior to distribution of the RFPs and assemble an evaluation committee. Advertise the request for proposals to the public. Evaluation committee will review proposals received by the published deadline and evaluate them per the previously documented criteria. 5. Contractors selected using the competitive proposals process will then participate in the continued design of the project and the options under consideration. They will provide cost estimates as needed and then the project scope and budget will be finalized. Contractor agreements will also be finalized. 6. The HRA will submit the project scope and budget to the HRA Board for approval prior to proceeding with the construction. Existing Procurement Policy: 76 of 83 77 of 83 PROCUREMENT PLANNING Planning is essential to managing the procurement function properly. Hence, the OTCHRA will periodically review its record of prior purchases, as well as future needs, to: find patterns of procurement actions that could be performed more efficiently or economically; maximize competition and competitive pricing among contracts and decrease the OTCI-IRA' s procurement costs; reduce OTCHRA administrative costs; ensure that supplies and services are obtained without any need for re-procurement, e.g., resolving bid protests; and minimize errors that occur when there is ina~equate lead time. Consideration should be given to storage, security, and handling requirements when planning the most appropriate purchasing actions. PURCHASING METHODS Petty Cash Purchases Purchases under $100.00 which can be satisfied by local sources, may be handled through the use of a petty cash account. Petty Cash Accounts may be established in an amount sufficient to cover small purchases made during a reasonable period, e.g., one month. For all Petty Cash Accounts, the OTCHRA shall ensure that security is maintained and only authorized individuals have access to the account. These accounts should be reconciled and replenished periodically. Small Purchase Procedures For any amounts above the Petty Cash ceiling, but not exceeding $100,000, the OTCHRA may use small purchase procedures. Under small purchase procedures, the OTCHRA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000, also known as Micro Purchases, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally ( either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the OTCHRA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The OTCHRA shall not break down requirements aggregating more than the small purchase threshold ( or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that applies to purchases that exceed the Micro Purchase threshold. Sealed Bids Sealed bidding shall be used for all contracts that exceed the small purchase threshold and that are not competitive proposals or non-competitive proposals, as these terms are defined in this document. Under sealed bids, the PHA publicly solicits bids and awards a firm fixed-price contract (lump sum or unit price) to the responsible bidder whose bid, conforming with all the material terms and conditions of the IFB, is the lowest in price. Sealed bidding is the preferred method for procuring construction, supply, and non-complex service contracts that are expected to exceed the small purchase limit. H:\Users\Agency Plan\Addendum to Procurement Policy otc O 1-19-20 IO.doc Page 3 of I 7 78 of 83 A. Conditions for Using Sealed Bids. OTCHRA shall use the sealed bid method if the following conditions are present: a complete, adequate, and realistic statement of work, specification, or purchase description is available; two or more responsible bidders are willing and able to compete effectively for the work; the contract can be awarded based on a firm fixed price; and the selection of the successful bidder can be made principally on the lowest price. B. Solicitation and Receipt of Bids. An IFB is issued which includes the specifications and all contractual terms and conditions applicable to the procurement, and a statement that award will be made to the lowest responsible and responsive bidder whose bid meets the requirements of the solicitation. The IFB must state the time and place for both receiving the bids and the public bid opening. All bids received will be date and time-stamped and stored unopened in a secure place until the public bid opening. A bidder may withdraw the bid at any time prior to the bid opening. C. Bid Opening and Award. Bids shall be opened publicly. All bids received shall be recorded on an abstract (tabulation) of bids, and then made available for public inspection. If equal low bids are received from responsible bidders, selection shall be made by drawing lots or other similar random method. The method for doing this shall be stated in the IFB. If only one responsive bid is received from a responsible bidder, award shall not be made unless the price can be determined to be reasonable, based on a cost or price analysis. D. Mistakes in Bids. Correction or withdrawal of bids may be permitted, where appropriate, before bid opening by written or telegraphic notice received in the office designated in the IFB prior to the time set for bid opening. After bid opening, corrections in bids may be permitted only if the bidder can show by clear and convincing evidence that a mistake of a nonjudgmental character was made, the nature of the mistake, and the bid price actually intended. A low bidder alleging a nonjudgmental mistake may be permitted to withdraw its bid if the mistake is clearly evident on the face of the bid document but the intended bid is unclear or the bidder submits convincing evidence that a mistake was made. All decisions to allow correction or withdrawal of a bid shall be supported by a written determination signed by the Contracting Officer. After bid opening, changes in bid prices or other provisions of bids prejudicial to the interest of the OTCHRA or fair competition shall not be permitted. Competitive Proposals Unlike sealed bidding, the competitive proposal method permits: consideration of technical factors other than price; discussion with offerors concerning offers submitted; negotiation of contract price or estimated cost and other contract terms and conditions; revision of proposals before the final contractor selection; and the withdrawal of an offer at any time up until the point of award. Award is normally made on the basis of the proposal that represents the best overall value to the PHA, considering price and other factors, e.g., technical expe1tise, past experience, quality of proposed staffing, etc., set f01ih in the solicitation and not solely the lowest price. A. Conditions for Use. Where conditions are not appropriate for the use of sealed bidding, competitive proposals may be used. Competitive proposals are the preferred method for procuring professional services that will exceed the small purchase threshold. 1-1:\Users\Agcncy Plan\Addendum to Procurement Policy otc O 1-19-20 IO.doc Page4 of 17 79 of 83 B. Form of Solicitation. Other than A/E services, competitive proposals shall be solicited through the issuance of a RFP. The RFP shall clearly identify the importance and relative value of each of the evaluation factors as well as any subfactors and price. A mechanism for fairly and thoroughly evaluating the technical and price proposals shall be established before the solicitation is issued. Proposals shall be handled so as to prevent disclosure of the number of offerors, identity of the offerors, and the contents of their proposals until after award. The OTCHRA may assign price a specific weight in the evaluation criteria or the OTCHRA may consider price in conjunction with technical factors; in either case, the method for evaluating price shall be established in the RFP. C. Evaluation. The proposals shall be evaluated only on the criteria stated in the RFP. Where not apparent from the evaluation criteria, the OTCHRA shall establish an Evaluation Plan for each RFP. Generally, all RFPs shall be evaluated by an appropriately appointed Evaluation Committee. The Evaluation Committee shall be required to disclose any potential conflicts of interest and to sign a Non-Disclosure statement. An Evaluation Report, summarizing the results of the evaluation, shall be prepared prior to award of a contract. D. Negotiations. Negotiations shall be conducted with all offerors who submit a proposal determined to have a reasonable chance of being selected for award, unless it is determined that negotiations are not needed with any of the offerors. This determination is based on the relative score of the proposals as they are evaluated and rated in accordance with the technical and price factors specified in the RFP. These offerors shall be treated fairly and equally with respect to any opportunity for negotiation and revision of their proposals. No offeror shall be given any information about any other offeror's proposal, and no offeror shall be assisted in bringing its proposal up to the level of any other proposal. A common deadline shall be established for receipt of proposal revisions based on negotiations. Negotiations are exchanges (in either competitive or sole source environment) between the PHA and offerors that are undertaken with the intent of allowing the offeror to revise its proposal. These negotiations may include bargaining. Bargaining includes persuasion, alteration of assumptions and positions, give-and-take, and may apply to price, schedule, technical requirements, type of contract or other terms of a proposed contract. When negotiations are conducted in a competitive acquisition, they take place after establishment of the competitive range and are called discussions. Discussions are tailored to each offeror's proposal, and shall be conducted by the contracting officer with each offeror within the competitive range. The primary object of discussions is to maximize the OTCHRA's ability to obtain best value, based on the requirements and the evaluation factors set fo1th in the solicitation. The contracting officer shall indicate to, or discuss with, each offeror still being considered for award, significant weaknesses, deficiencies, and other aspects of its proposal (such as cost, price, technical approach, past performance, and terms and conditions) that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposer's potential for award. The scope and extent of discussions are a matter of the contracting officer's judgment. The contracting officer may inform an offeror that its price is considered by the PHA to be too high, or too low, and reveal the results of the analysis supp01ting that conclusion. It is also pe1missible to indicate to all offerors the cost or price that the government's price analysis, market research, and other reviews have identified as reasonable. "Auctioning" (revealing one offeror's price in an attempt to get another offeror to lower their price) is prohibited. H:\Users\Agency Plan\Addcndum to Procurement Policy otc 01-19-20IO.doc Page 5 of 17 80 of 83 E. Award. After evaluation of the revised proposals, if any, the contract shall be awarded to the responsible firm whose technical approach to the project, qualifications, price and/or any other factors considered, are most advantageous to the OTCHRA provided that the price is within the maximum total project budgeted amount established for the specific property or activity. F. AIE and Development Partner Services. The OTCHRA must contract for A/E services using QBS procedures, utilizing a RFQ. Sealed bidding shall not be used for A/E solicitations. Under QBS procedures, competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. Price is not used as a selection factor under this method. QBS procedures shall not be used to purchase other types of services, though architectural/engineering firms are potential sources. Noncompetitive Proposals A. Conditions for Use. Procurement by noncompetitive proposals (sole-source) may be used only when the award of a contract is not feasible using small purchase procedures, sealed bids, cooperative purchasing, or competitive proposals, and if one of the following applies: 1. The item is available only from a single source, based on a good faith review of available sources; 2. An emergency exists that seriously threatens the public health, welfare, or safety, or endangers prope1ty, or would otherwise cause serious injury to the OTCHRA, as may arise by reason of a flood, earthquake, epidemic, riot, equipment failure, or similar event. In such cases, there must be an immediate and serious need for supplies, services, or construction such that the need cannot be met through any of the other procurement methods, and the emergency procurement shall be limited to those supplies, services, or construction necessary simply to meet the emergency; 3. HUD authorizes the use of noncompetitive proposals; or 4. After solicitation of a number of sources, competition is determined inadequate. B. Justification. Each procurement based on noncompetitive proposals shall be supp01ted by a written justification for the selection of this method. The justification shall be approved in writing by the responsible Contracting Officer. Poor planning or lack of planning is not justification for emergency or sole-source procurements. The justification, to be included in the procurement file, should include the following information: 1. Description of the requirement; 2. History of prior purchases and their nature (competitive vs. noncompetitive); 3. The specific exception in 24 CFR 85.36(d)(4)(i)(A) through (D) which applies; 4. Statement as to the unique circumstances that require award by noncompetitive proposals; 5. Description of the effmts made to find competitive sources (adve1iisement in trade journals or local publications, phone calls to local suppliers, issuance of a written solicitation, etc.); 6. Statement as to effo1ts that will be taken in the future to promote competition for the requirement; H:\Uscrs\Agency Plan\Addendum to Procurement Policy otc O 1-19-20 I 0.doc Page 6 of 17 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 7. EXECUTIVE DIRECTOR REPORT 81 of 83 !!) EOU/\L HOUSING OPPORTUNITY MEMO TO: Otter Tail County HRA Board of Commissioners Wayne Johnson, Chairperson Lee Rogness, Vice Chairperson Kurt Mortenson, Secretary Betty Murphy, Commissioner Jeff Ackerson, Commissioner FROM: Barbara Dacy, Executive Director, Otter Tail County HRA DATE: April 12, 2023 SUBJECT: Executive Director Report 1. Public Housing Assessment Score. The Authority has been scored as a “High Performer” for fiscal year 2022 according to the recently issued assessment score by HUD. In four performance areas, the Authority scored 96 points out of 100 points possible. Congratulations to the hard work of Tanya Westra, Project Manager, Julie Bakken, Accounting Specialist, Randy Hoffman, Lead Maintenance Technician, and Paula Grunewald, Administrative Assistant. This is a significant accomplishment for the staff team! The scoring is as follows: Public Housing Assessment System Indicators Score Maximum Score Physical 39 40 Financial 25 25 Management 22 25 Capital Fund 10 10 Late Penalty Points 0 - PHAS Total Score 96 100 2. Minnesota Housing Rural Residential Rehabilitation Program. Minnesota Housing is taking proposals from owners of the USDA financed affordable housing properties for significant rehabilitation projects. The USDA program is known as Section 515, which provides lower interest rate financing for owners as well as project based rental assistance. Staff contacted the owners/managers of 8 properties with this financing in New York Mills, Henning, Parkers Prairie, Pelican Rapids, Battle Lake and Underwood. There are four property owners serving a total of 55 households (primarily elderly and disabled) interested in applying for this program for new roofs, windows, boilers and other items. This funding is an important preservation tool to keep these properties in good shape. The owners/managers will be responsible for preparing and submitting the applications, but staff wants to keep in touch to assist, if needed. 82 of 83 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 8. GENERAL DISCUSSION TOPICS BY COMMISSIONERS and ADJOURN 83 of 83 !!) EOU/\L HOUSING OPPORTUNITY