Red Wing Housing & Redevelopment Authority

Transcription

1 Red Wing Housing & Redevelopment Authority 428 West Fifth Street Telephone (651) Redwing, MN FAX (651) TDD/TTY February 14, 2016 To: Red Wing HRA Board of Commissioners From: Randal Hemmerlin, Executive Director Re: Resolution No to accept offer by HOPE Coalition to Settle Outstanding Repair Bill for Transitional Housing property at Hill Street Background: In late 2015, the HRA completed repair work at the Hill Street property representing deferred maintenance and tenant damages. The HRA billed the HOPE Coalition $12, Two of the three units at the Hill Street property were involved In the repair work. The HRA has given HOPE Coalition several invoices detailing the billing. HOPE Coalition has contested the amount of the billing. The HRA met with HOPE Coalition in April of 2016 to discuss the matter more thoroughly. On November 16, 2016, the Executive Director wrote HOPE Coalition the following as part of a letter: "In the matter of the outstanding $12, billing for tenant damage repairs, we do need to bring it to a resolution. We are attaching a detailed invoice with supporting documentation. If there is disagreement in a line item, we can discuss further. We are inviting HOPE Coalition to sit down with us and go over the invoice. We understand that there may be some disagreement between us on tenant damage versus maintenance. If we can come to a dollar amount that both parties can agree upon, I am wiiling to present it to the HRA Board for settlement of the account. The HRA Board has final approval authority." HOPE Coalition responded to this letter with a written response dated November 19, That letter is attached and gives their reasons for the amounts they will pay In the repair bill. In that response, HOPE states they will pay $2, of the $12, The HRA received a check on January 9, 2017 for the $2, The check is in the HRA safe as we need to know if the Board of Commissioners will accept this as the final offer for settlement of the bill before we deposit It. The Executive Director confirmed this was their settlement offer. The HRA received a termination notice dated January 17, 2017 by HOPE Coalition of the lease on the Hill Street Property. The existing lease states that they are to give us a three-month notice for termination of the lease. If we extend the three months to its fullest, HOPE should be out of the Transitional Housing property by May 1, 2017 at the latest. The HRA had sent a new lease to HOPE in November or 2016 with a rent increase as approved by the Board in the September 29, 2016 workshop. Analysis The building needed to be repaired regardless of payment. In that regard, the HRA has taken that step and fixed up our own building. Our communications with HOPE Coalition regarding the repairs could have been better from the start of repairs by indicating their responsibilities for EQUAL OPPORTUNITY HOUSING / EQUAL OPPORTUNITY EMPLOYMENT

2 Red Wing Housing & Redevelopment Authority 428 West Fifth street Telephone (651) Redwing, MN FAX (651) TDD/TTY costs and getting prompt feedback. At the same time, the communications between the HOPE Coalition and the HRA in this matter have been strained from the beginning. One of our goals during a new lease process was to increase our dialogue between the two organizations to avoid billing disagreements in the future. Because the lease is terminated by HOPE Coalition and the property will become available for rent to another transitional housing provider, we are effectively ending our relationship with HOPE in this property. They are still leasing the Women's Center from us. The HRA has the following options: Accept the offer and settle the account. Counter offer an amount based upon a review of the case file and Invoices. Continue to negotiate with HOPE Coalition. Return the check and continue to pursue full payment including through a court action. Staff recommends that we accept the amount as an agreed settlement. It should be noted in the Board Resolution that the HRA admits no wrongdoing in the matter but in the interest of both parties agrees to settle the account for the offered amount. Returning the check and pursuing full payment will be costly for the HRA as legal fees will be incurred and our reputation in the community may be damaged through such an action. The Executive Director stated to HOPE Coalition that an offer would be presented to the Board for consideration. Recommendation; Staff recommends and the Finance Committee (2-1) give a favorable recommendation to the HRA Board of Commissioners to adopt Resolution No to approve accepting $2, as final settlement of the outstanding repair bill ($12,161.62) for the Hill Street property. EQUAL OPPORTUNITY HOUSING / EQUAL OPPORTUNITY EMPLOYMENT

3 Resolution No Resolution to approve accepting the HOPE Coalition offer of $2, to settle a repair bill of $12, at Transitional Housing Property WHEREAS, the HOPE Coalition leases the Hill Street Property for a Transitional Housing program from the HRA, and, WHEREAS, in late 2015, the Red Wing Housing and Redevelopment Authority completed repairs at its Transitional Housing Property at Hill Street, and WHEREAS, the billing for the repairs to HOPE Coalition was in the amount of $12,161.00, representing tenant damages only, and WHEREAS, the HOPE Coalition contested the amount stating that the billing was not detailed enough for them to understand exactly what they were paying for, and WHEREAS, the HRA and HOPE Coalition have attempted several times to come to a satisfactory resolution of the invoice, and WHEREAS, the HOPE Coalition has offered $2, to settle the entire repair bill and has given the HRA a termination notice of their lease with the Transitional Housing Property, and WHEREAS, both parties continue to hold to their positions as correct, and WHEREAS, the HRA and HOPE Coalition desire to settle the matter, and WHEREAS, accepting the offer at this time is in the best interest of the HRA, the HOPE Coalition and the Community at large, and WHEREAS, in accepting this offer the HRA is not stating that the billing was incorrect but that a settlement is the best method going forward for all parties. THEREFORE, BE IT RESOLVED that the Red Wing Housing and Redevelopment Authority Board of Commissioners adopts Resolution No accepting Hope Coalition's offer of $2, to settle the outstanding repair bill of $12, and considers the matter totally resolved. Dated: February 14, 2017 Chairman Secretary/Treasurer

4 Charity Search Results HOPE Coalition Organization Type Contact Person Address City State Zip Code Purpose or Description Phone Number Status Extension CHARITY Kristine Kvols 1407 West 4th Street Red Wing MN Formed to address the issue of homelessness. We maintain five units of housing for single parents or single women. Along with this lowincome, subsidized housing, we provide case management and support services by a half-time program coordinator. The goal of the program is to assist the participants to set and reach their intermediary goals necessary for securing permanent housing and permanency within the community, (651) Active None HOPE Coalition Federal ID# For Fiscal Year Ending 9/30/2015 Income Direct Public Support Government Grants Other Revenue Total Revenue $322,068 $761,614 $17,637 $1,101,319 Expenses Amount Spent for Program or Charitable Purposes Management/General Expense Fundraising Expense Total Expenses $877,227 $92,941 $30,488 $1,000,656 Excess/Deficit $100,663 Total Assets Total Liabilities End of Year Fund Bal/Net Worth $512,662 $52,008 $460,654

5 FaegreBD.com B^GRE BM<ER USA UK CHINA DANIELS Charles S. Ferrell Faegre Baker Daniels LLP Of Counsel 2200 Wells Fargo Center» 90 South Seventh Street Minneapolis * Minnesota Direct Main Fax -f January 17, 2017 Richard D. Gorman Vogei & Gorman, PLC 454 West 4th Street Red Wing, MN Re: HOPE Coalition Lease Dear Mr. Gorman: I believe that you are counsel to the Red Wing Housing & Redevelopment Authority. I write in response to a letter to me from Randal Hemmerlin dated January 3, We appreciate the constructive progress reflected in that letter. Differences of perspective between the HRA and HOPE Coalition regarding the 420,422 and 422 1/2 Hill Street property have persisted for almost a year, and HOPE Coalition has come to the recognition that the HRA and HOPE Coalition are not going to get on the same page regarding the maintenance challenges of this property. HOPE Coalition concludes that it is the best interests of both HRA and HOPE Coalition to move on. This letter is notice of termination of the Lease dated December 19, 2007, for the 420, 422 and 422 1/2 Hill Street property pursuant to Paragraph D of said Lease. The other property leased from the HRA by HOPE Coalition, 255 East 5**^ Street, does not have the same history of differences of perspective and is also critically important to the mission of HOPE Coalition. HOPE Coalition is hopeful that the negotiation of lease terms that has been advanced for lhe-420, 422 and 422 1/2 Hill Street property can be applied to the lease for 255 East 5*^ Street. To that end, and pursuant to the constructive invitation in Mr. Hemmerlin's letter of January 3, 2017,1 will prepare and send to you a draft of a renewal lease for 255 East 5'*^ Street. us ,02

6 Richard D. Gorman -2- January 17, 2017 I look forward to working with you. Sincerely yours. Charles S. Ferrell FERCS:grekm cc: Red Wing HRA (by certified mail) Kris Kvols

7 V. s HOPE \1 COALITION / (wea t^lfum^ '^O'PS December 19,2016 Randal Hemmcrlin, Executive Director Red Wing Housing & Redevelopment Authority 428 W. 5*^ Street Red Wing, MN Dear Mr. Hemmcrlin: This letter is HOPE'S response to the outstanding invoices ineluded in HRA's packet, dated November 16,2016, postmarked 11/21/16, and received by HOPE Coalition on November 22,2016. The documents in the packet were shared with HOPE Coalition's Executive Committee and reviewed at the Executive Committee Meeting on December 1, The documents were also reviewed with Charles Ferrell, the attorney advising HOPE Coalition regarding these matters. Despite HOPE Coalition's verbal request on April 15, 2016 (and reiterated in our letter dated June 30,2016) for additional, detailed documentation, including photographs and/or descriptions of the tenant damage, the HRA again has only provided minimal receipts and documentation to support the invoices. The information provided by the LIRA is such that no reasonable party, including the HRA, would accept it as sufficient from an outside contractor; particularly when not agreed upon prior to beginning the work and not within the current lease agreement, 'ilie HRA's decision to resend the invoices without details is frustrating and leaves HOPE Coalition in the difficult position of making an educated guess at what work was required as a result of tenant damage, and to identify line items where the agencies disagree. With respect to the longstanding partnership between the two agencies and with the goal of resolving the outstanding invoices, IIOPE's Executive Committee will agree to the following: Materials 420 Hill Street - HOPE Coalition will pay $352.57, of the $984.82, billed for materials. This amount has documentation to support payment. HOPE will not pay for the remaining materials billed because the HRA has not provided corresponding receipts or other forms of documentation for those materials. 422 Vi Hill Street - HOPE Coalition will not pay for $ of materials charged for 422 Vz Hill Street because the HRA has not provided corresponding receipts or supporting documentation. Labor 422 Vt Hill Street - HOPE Coalition will pay 8 hours of labor at HRA's rate of $75 per hour (totaling $600). We believe this is generous given the incoraplete documentation and lack of details to substantiate that repairs were required due to tenant damage. Wc calculated these hours as follows: 5 hours for blinds: Based on the list of materials and the limited labor documentation provided by the HRA, we assume that 5 sets of bl inds were replaced on 12/7/15. However, the work done that day is listed as "Blinds, stove, flooring" at 16 hours, with no detail about how much time was spent on each of these 3 projects. HOPE estimates that replacing the blinds should take no more than an hour each. 3 hours for filling holes: On 11/30/15, a total of 6 hoiu-s was documented for "painted ceiling + filled in holes", with no breakdown as to how many hours were spent filling holes, what sort of holes were filled, lof2

8 or if the holes were caused by tenant damage. Despite the lack of documentation, HOPE will pay for 3 hours of labor for filling holes. 420 Hill Street - HOPE Coalition will pay for 14 hours of labor at HRA's rate of $75 per hour (totaling $1,050) for work completed. Based on the list of materials and the minimal labor documentation provided by the HRA, we estimate these hours as follows: 10 hours for 6 doors: 6 doors were purchased according to receipts provided. Documentation for 1/12/16 states 10 hours of labor for "doors", and we assume all 6 doors were installed on that date. 2 hours for mudding: On 12/17/15, 12 hours were logged for "started paint ceilings, wash walls, mud". There was no specification about how much time was spent on each of these three projects, supporting documentation regarding how long each task took, or clarification of what work was required as a result of tenant damage. 2 hours for sanding: On 12/21/15,12 hours were logged for "sand walls, paint walls." With no documentation of how much time was spent on either project, or if the work was required as a result of tenant damage, HOPE Coalition will pay for 2 hours. The HRA failed to provide any documentation to clarify the more than 44 hours of work that were generically recorded only as "repairs" on 1/13,1/19, 1/20, 1/21, and 1/22 of HOPE will not pay for "repairs" without any information, specifically (or even generally), as to what was repaired, how long each repair project took, or if the repair was a result of tenant damage. HOPE Coalition maintains, as stated in letter to the HRA dated June 30,2016, that "Based on our understanding of the language in the current lease. Section H. REPAIRS AND MAINTENANCE, all cleaning and painting is HOPE Coalition's responsibility and routine maintenance is the HRA's responsibility... Cleaning and painting would normally be HOPE'S responsibility, but HRA chose to take on those tasks without notifying HOPE in advance of their intent to do that work and to bill HOPE Coalition for it, and since HOPE was not offered the opportunity, as specified in the lease, to correct these issues prior to any possible HRA repairs, HOPE Coalition does not see those charges as our responsibility." Therefore, HOPE will not pay for any cleaning and painting costs (materials or labor) incurred by the HRA. Representatives from HOPE will accept the HRA's invitation to meet personally and further discuss the invoices, if.so requested. I can be reached by phone at x9 or via at kkvols@hope-coalition.org. Janet Adams, HOPE Coalition's Board Chair, can be reached at or janet.adams@co.goodhue.mn.us. Sincerely, Kristinc S. Kvols, Executive Director cc: Janet Adams, HOPE Coalition Board Chair Kim Chalmers, HRA Board Chair Roseanne Grosso, IIRA Liaison to HOPE Board of Directors Becky ITinrichs, HRA Housing Specialist Charles Terrell, Attorney 2 of 2