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2018.12.04 EDA Meeting PacketAGENDA ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL •REGULAR MEETING • TUESDAY, DECEMBER 4, 2018 6:45 P.M. CRYSTAL CITY HALL COUNCIL CHAMBERS 1.Call to order * 2.Roll call * 3. Approval of minutes from the September 4, 2018 regular meeting 4.Consider a resolution adopting a 2019 budget and property tax levy and requesting their approval by the City Council 5.Consider approval of a contract with Center for Energy and the Environment for administration of home improvement programs in 2019 6.Other business * 7. Adjournment * *Items for which no materials are included in the packet Page 1 of 1 Minutes of the Economic Development Authority of the City of Crystal Regular Meeting September 4, 2018 1.Call to Order President Parsons called the regular meeting of the Economic Development Authority of the City of Crystal (EDA) to order at 6:45 p.m. 2.Roll Call Upon call of the roll, the following members were present: John Budziszewski, Elizabeth Dahl, Julie Deshler, Jeff Kolb, Nancy LaRoche and Olga Parsons. The following staff members were present: Anne Norris, Executive Director, John Sutter, Deputy Executive Director and Troy Gilchrist, City Attorney. 3. Approval of Minutes Motion by Commissioner Dahl (LaRoche) to approve the minutes of the May 15, 2018 work session and June 5, 2018 regular meeting. Motion carried. 4. Consider a resolution approving a proposed HRA tax levy for 2019 Mr. Sutter presented the staff report and took questions from the Board. Motion by Commissioner Kolb (Deshler) to adopt the resolution approving a proposed HRA tax levy for 2019. Motion carried. 5.Other Business There was no other business. 6. Adjournment Motion by Commissioner LaRoche (Dahl) to adjourn. Motion carried. The meeting adjourned at 6:50 p.m. ______________________________ Olga Parsons, President ATTEST: ______________________________ Elizabeth Dahl, Secretary _____________________________________________________________________ FROM: Jean McGann, Finance Director _____________________________________________________________________ DATE: November 29, 2018 TO: Anne Norris, Executive Director (for December 4, 2018 EDA meeting) SUBJECT: Consider a resolution adopting a 2019 HRA tax levy and budget As part of the annual budgeting process, the EDA formally requests a Housing and Redevelopment Authority tax levy which would comprise part of its funding. The 2018 levy was $277,200. Staff is recommending a 2019 levy of $282,744 which is a 2% increase. Another 2% increase is proposed for 2020, although that will require separate action a year from now. Biennial Budget Summary: 2018 2019 2020 Adopted Proposed Proposed Revenue 427,200 323,744 328,399 Expenditures 413,970 352,952 411,305 Est. YE Fund Balance 3,203,865 2,174,657 2,091,753 Anticipated 2019 EDA activities:  Becker Park reconstruction (EDA share paid out of fund balance)  Sale of properties currently being held by the EDA (proceeds added to fund balance)  Home improvement grants for homes outside the redevelopment project area Adoption of the attached resolution is requested. EDA STAFF REPORT 2019 HRA Levy ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. 2018 - 09 RESOLUTION ADOPTING A 2019 BUDGET AND PROPERTY TAX LEVY AND REQUESTING THEIR APPROVAL BY THE CITY COUNCIL WHEREAS, the Economic Development Authority of the City of Crystal (the “EDA”) undertakes redevelopment and housing activities in the City of Crystal, Minnesota (the “City”); and WHEREAS, pursuant to authority granted by Minnesota Statutes, Section 469.02 and the enabling resolution of the EDA, the EDA exercises all of the powers of a housing and redevelopment authority (“HRA”) as described in Minnesota Statues, Section 469.001 to 469.047 (the “Act”); and WHEREAS, under Section 469.033 Subdivision 6 of the Act, an HRA is authorized to levy and collect special benefit taxes on all taxable property under the jurisdiction of the HRA, that is, property in the City; and WHEREAS, the permitted levy is 0.0185 percent of the estimated market value of the property in the City. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City of Crystal as follows: 1. The EDA hereby adopts a proposed 2019 budget for housing and redevelopment in the amount of $352,952. 2. The EDA hereby adopts a 2019 property tax levy of $282,744 for the purpose of funding the adopted budget in conformance with Section 469.033, Subdivision 6 of Minnesota Statutes. 3. The Executive Director is authorized and directed to transmit a certified copy of this Resolution to the City Council of the City of Crystal for its consent and approval as provided by Section 469.033 of the Act and for certification to the Property Tax Manager of Hennepin County. Adopted this 4th day of December, 2018. _______________________________ Olga Parsons, President _______________________________ Anne Norris, Executive Director ___________________________________________________________________________ FROM: John Sutter, Community Development Director ___________________________________________________________________________ DATE: November 29, 2018 TO: Anne Norris, City Manager (for December 4 EDA meeting) SUBJECT: Consider proposed contract with Center for Energy and the Environment for 2019 home improvement assistance programs The closure of the Housing Resource Center in late 2017 required Crystal and other cities to find alternative providers for locally-funded home improvement programs. In 2018 Crystal began contracting with Center for Energy and the Environment (CEE) to administer the Crystal Grant Program (formerly the Incentive Rebate Program) and the Interest Subsidy Program for Community Fix-Up Fund loans. The table on the following page compares the now-closed 2017 programs with the current 2018 programs and proposed 2019 budget. (The 2019 EDA and TIF budgets include these program costs.) Staff requests authorization to execute the attached 2019 contract with CEE. EDA STAFF REPORT Home Improvement Programs for 2019 2017 Actual 2018 thru 11/30 2018 Budget 2019 Budget GMHC/HRC CEE CEE CEE Annual Admin Fee*1 $15,000 $1,500 $1,500 $500 Grants (fka Rebates)2 $134,185 $76,654 $163,800 $163,800 Grant Admin Fees*3 $39,250 $7,538 $24,570 $24,570 Post-Installation Inspections*4 $600 $2,000 $1,000 CFUF Interest Write-Down 5 $25,000 $8,961 $25,000 $25,000 CFUF Admin Fees*6 $625 $750 $750 $213,435 $95,878 $217,620 $215,620 $54,250 $10,263 $28,820 $26,820 25.4%10.7%13.2%12.4% NOTES: 1 There was a $1,500 fee in 2018 to set up the program at CEE, being replaced by a $500 annual fee going forward 2 The amount available for grants in 2019 would be the same as in 2018 3 CEE's rebate admin fee is 15% of actual rebates paid, but the last carryover grants from 2017 are being closed out in-house so there's no admin fee for those 4 Some projects don't require permits so CEE will do site visits to verify work ($100 per project) 5 The Minnesota Housing Finance Agency will match the city's $25,000 with another $25,000 for the CFUF interest write-down program 6 CEE charges $125 for each CFUF loan closed (est. 6 per year) ITEM NOTES Admin as % of Total: TOTAL: *Administrative Costs: CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF CRYSTAL and CENTER FOR ENERGY AND ENVIRONMENT CEE #______ Page 1 HOME IMPROVEMENT PROGRAM ORIGINATION AGREEMENT This HOME IMPROVEMENT PROGRAM ORIGINATION AGREEMENT (“Agreement”), dated this _____ day of _____________________, 20____, is made by and between the ECONOMIC DEVELOPMENT AUTHORITY in and for the City of Crystal, with offices at 4141 Douglas Dr N, Crystal, MN 55422 (“Authority”), and CENTER FOR ENERGY AND ENVIRONMENT, with offices at 212 3rd Avenue North, Suite 560, Minneapolis, Minnesota 55401 (“CEE”). RECITALS A. The Authority has a need for certain professional services and desires to retain CEE to provide said services, all subject to the terms and conditions contained in this Agreement. B. CEE is qualified to provide the desired professional services and desires to provide said services for the Authority, all subject to the terms and conditions contained in this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained in this Agreement, the parties agree as follows: 1. Services/Scope of Work 1.1 CEE shall in conjunction with the Authority develop and deliver the City of Crystal Home Improvement Program (hereinafter the “Program”) and more fully described in Exhibit A attached hereto. All activities delivered under the Program shall be coordinated with the Authority’s designated Community Development Director, John Sutter. 1.2 CEE shall assist the Authority staff in marketing the Program. This will include being on the CEE website and creating an information sheet about the loan program. 1.3 The funding source is exclusively from the Authority. 2. Compensation 2.1 The Authority shall compensate CEE for services provided under this agreement according to the following schedule and more fully described in Exhibit B attached hereto: Annual Administration Fee $500 Interest Subsidy Fee $125 MHFA Interest Subsidy $varies on loan amount and term Post Installation Inspection Fee $100 Grant Origination Fee 15% The Annual Administration Fee shall be payable on January 1st of each year the contract is active. CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF CRYSTAL and CENTER FOR ENERGY AND ENVIRONMENT CEE #______ Page 2 The Authority shall compensate CEE only for services completed. Upon request, CEE will provide additional marketing services for the following fees: CEE Labor $65/hr Hourly rates are inclusive of all overhead expenses and will be charged only for hours directly related to marketing. CEE will be reimbursed by the Authority for any non-labor, out-of-pocket expenses, relating to these services on a dollar-for-dollar basis with no mark-up. 2.2 CEE shall invoice the Authority not more than two times each month for the principal of loans and administrative fees. The Authority shall pay CEE within 20 days of receipt of the invoice. 3. CLIENT’s Obligations 3.1 If requested by CEE, the Authority shall make reasonable efforts to respond promptly to requests from CEE for information and approvals regarding the services to be provided under this Agreement. 3.2 If requested by CEE, the Authority shall make reasonable efforts to obtain information and or permission for access from clients which may be necessary for CEE to provide the services under this Agreement. 3.3 The Authority shall provide sufficient funding to fund eligible Authority funded loans. The Authority shall determine the amount of funds allocated to the Program. 3.4 The Authority shall establish eligibility for the Program and shall provide these criteria in writing to CEE prior to commencement of any marketing efforts. 3.5 The Authority shall make reasonable efforts to respond promptly to requests from CEE for information and approvals regarding the services to be provided under this Agreement. 4. CEE’s Obligations 4.1 CEE shall use its best efforts to provide services under this Agreement in a professional manner consistent with the care and skill used by reputable members of CEE’s profession. 4.2 CEE, and all of its employees or agents, shall comply with all statutes, ordinances, rules, regulations and other laws applicable to the provision of services under this Agreement. 4.3 CEE shall secure all permits and licenses required for performance of the services under this Agreement. CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF CRYSTAL and CENTER FOR ENERGY AND ENVIRONMENT CEE #______ Page 3 4.4 CEE shall not engage in discriminatory employment practices against any employee or applicant for employment and shall in all respects comply with all federal, state and local laws, regulations and orders, including without limitation, Chapter 363 of the Minnesota Statutes, as amended from time to time. Failure to comply with the provisions hereof shall be deemed a material default under this Agreement. 5. Term and Termination 5.1 Unless earlier terminated as provided in the following paragraphs, this Agreement shall become effective on 1/1/2019, and continue through 12/31/2019. 5.2 This Agreement may be terminated by either party, for any reason or no reason, immediately upon written notice to the other party. In the event this Agreement is terminated by CEE prior to the expiration of the term set forth in paragraph 5.1, the Authority shall compensate CEE for all services delivered up the date of termination and CEE shall provide the Authority with such information as the Authority may request regarding the status of the Program. 5.3 Any termination of this Agreement shall not release either party from their respective obligations under sections 7 and 8 of this Agreement. 6. Insurance 6.1 During the term of this Agreement, CEE will obtain and maintain insurance in the amounts listed below: General Liability $2,000,000 Aggregate Limit Automobile Liability $1,000,000 Combined Single Limit Excess Liability $1,000,000 Aggregate Limit Workers Compensation Statutory Limit 7. Liability and Indemnification 7.1 CEE represents that the services to be provided under this Agreement are reasonable in scope and that CEE has the experience and ability to provide the services. 7.2 CEE warrants that any services provided hereunder shall be done in a professional and workmanlike manner. 7.3 CEE shall indemnify, defend and hold harmless Authority and its officers, directors, employees and agents from and against any and all claims, damages, losses, injuries and expenses (including attorneys’ fees and damages for death, personal injury and property damage) which Authority may incur as a result of any act or omission by CEE in providing services under this Agreement. 7.4 Authority shall indemnify, defend and hold harmless CEE and its officers, directors, employees and agents from and against any and all claims, CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF CRYSTAL and CENTER FOR ENERGY AND ENVIRONMENT CEE #______ Page 4 damages, losses, injuries and expenses (including attorneys’ fees and damages for death, personal injury and property damage) which CEE may incur as a result of any act or omission by Authority in discharging its duties under this Agreement. 8. Confidentiality Unless otherwise agreed by Authority in writing, CEE shall maintain in confidence and not disclose to any third party any information obtained regarding the Authority and/or any of Authority’s clients for which CEE is providing services; provided, however, that this obligation to maintain confidentiality shall not apply to: a) Information in the public domain at the time of disclosure; b) Information which becomes part of the public domain after disclosure through no fault of CEE; or c) Information which CEE can demonstrate was known by it prior to the date of this Agreement. Notwithstanding the foregoing, CEE shall be entitled to disclose the documents or client information covered by this paragraph to governmental authorities to the extent CEE reasonably believes it has a legal obligation to make such disclosures and to the extent CEE reasonably deems to be necessary; provided, however, that if CEE believes that any such disclosure is required by law, it shall provide advance notice to the Authority to provide the Authority with a reasonable opportunity to attempt to obtain an injunction or other protective order preventing such disclosure. 9. Relationship of Parties CEE will provide services as an independent contractor under this Agreement. Neither CEE, nor any of its employees or agents, shall be considered employees of the Authority for any purpose, and neither shall CEE be eligible for any compensation or benefits which the Authority may provide to its employees from time to time. CEE shall be solely responsible for all employment and other taxes applicable to providing services hereunder, and the Authority will not withhold any taxes or contributions from the compensation payable to CEE under this Agreement. 10. Notices All notices, requests, demands and other communications required to be given in writing under this Agreement shall be given to the other party in person or by mail as provided in this section. If delivered personally, notice shall be deemed to have been duly given on the date of delivery. If delivered by mail, such notice shall be sent via first class U.S. mail, postage prepaid, to the address set forth at the beginning of this Agreement or such other address as a party may otherwise request by written notice, and notice shall be deemed duly given three (3) business days after mailing. CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF CRYSTAL and CENTER FOR ENERGY AND ENVIRONMENT CEE #______ Page 5 11. Assignment This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, successors and assigns; provided, however, that neither party shall assign or transfer in any manner, this Agreement or any portion hereof without the prior written consent of the other party, and any attempt to assign or transfer without prior written consent shall be void and of no effect. 12. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 13. Miscellaneous 13.1 Headings and captions used in this Agreement are for convenience only and shall not affect the meaning of this Agreement. 13.2 This Agreement contains the entire agreement of the parties and supersedes all prior agreements, discussions and representations, written or oral, concerning the subject matter hereof. 13.3 No waiver by the Authority of any term or condition of this Agreement or any document referred to herein shall, whether by conduct or otherwise, be construed as a waiver or release of any other term or condition of this Agreement. 13.4 This Agreement may only be amended in a written agreement signed by both parties. 13.5 Except as expressly set forth in section 7, the rights and benefits under this Agreement shall inure solely to the benefit of the Authority and CEE, and this Agreement shall not be construed to give any rights, benefits or causes of action to any third party. 13.6 The invalidity or partial invalidity of any provision of this Agreement shall not invalidate the remaining provisions, and the remainder shall be construed as of the invalidated portion shall have never been a part of this Agreement. 13.7 CEE shall comply with the provisions of Minnesota Statutes Chapter 13 (Government Data Practices) that are applicable to the Authority and shall not disseminate any information concerning loan requests of the borrowers without the prior written approval of the Authority. 13.8 This Agreement may be signed in any number of counterparts, each of which shall be deemed an original and one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. CONTRACT between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF CRYSTAL and CENTER FOR ENERGY AND ENVIRONMENT CEE #______ Page 6 ECONOMIC DEVELOPMENT AUTHORITY in and for the City of Crystal By: Its: Print Name Date: CENTER FOR ENERGY & ENVIRONMENT By: Its: Corporate Secretary Jennifer Amendt Date: Tax ID # 41-1647799 Exhibit A - #2808 Page 1 Agreement between Crystal EDA and Center for Energy and Environment EXHIBIT A1 PROGRAM GUIDELINES This document includes guidelines for the City of Crystal Grant Program and the MHFA Interest Subsidy Program Exhibit A - #2808 Page 2 Agreement between Crystal EDA and Center for Energy and Environment CRYSTAL PROGRAM GUIDELINES The Crystal Economic Development Authority (Authority) is making funds available for homeowners to assist with home maintenance and energy improvements. The Crystal Grant and Interest Subsidy Programs are designed to supplement existing loan programs available from MHFA, CEE, private lenders and other housing resources. These programs are not intended to be the sole source of improvement funds available to the homeowners in the City. Center for Energy and Environment shall serve as the administrator for the Crystal Grant and Interest Subsidy Programs and will secure the most beneficial financing based on the borrower’s needs independent of the funding source. Crystal Grant Program Eligible Project Expenses: • Interior remodeling • Building additions • Finishing basements, attics or similar spaces to convert them into habitable space • Energy efficiency improvements • Exterior building improvements such as roofing, siding, soffits/fascia, windows and doors • Site improvements such as retaining walls, sidewalks, driveways, fences, patios, decks, garages and the removal of diseased or hazardous trees • Systems such as HVAC, electrical and plumbing • Permanent Landscaping Ineligible Project Expenses: • Payment for work initiated prior to the grant being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.) • Furniture, non-permanent appliances (unless part of a kitchen remodel), funds for working capital, debt service or refinancing existing debts. • Homeowner labor or other in-kind contributions to the project Minimum Project Size: Eligible Project Expenses must total at least $5,000 to qualify for a grant. Exception: There is no minimum project size for repair or replacement of sanitary sewer service lines. Grant Amount: 20% of Eligible Project Expenses. No property may receive grants totaling more than $10,000 in any calendar year. Eligible Properties: 1-4 unit owner-occupied properties located within the geographical boundaries of the City of Crystal. Properties held in a Trust, Townhomes and Condominiums are eligible, subject to Association Bylaws. Properties may be held in a Contract for Deed. If the property has more than 1 Exhibit A - #2808 Page 3 Agreement between Crystal EDA and Center for Energy and Environment unit, the non-owner-occupied units must be in compliance with the City of Crystal’s rental licensing requirements. Ineligible Properties: Dwellings with more than 4 units, cooperatives, manufactured homes, time shares, properties used for commercial purposes and non-owner occupied properties. Eligible Recipients: All recipients must be legal residents of the United States, as evidenced by a social security number, Including: U.S. Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens. TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE. Ineligible Recipients: Including but not limited to: - Businesses, Foreign Nationals, Non-Occupant Co- Borrowers, and Properties held in the name of a trust. Income Limit: The property owner’s household income shall not exceed 110% of the HUD Regional Median Income based on household size. Income will be determined by the adjusted gross income on the most recent Federal Tax Return. If a tax return is not required, income will be determined by the projected gross income for the upcoming 12 months. Credit Requirements: 1) All mortgage payments must be current, 2) All real estate taxes must be current, and 3) No defaulted government loans, tax liens or child support. Bids: Two estimates are required. Only 1 materials list is required for sweat equity projects. All contractors must be properly licensed Sweat Equity / Homeowner Labor: Work may be performed by property owners on a “sweat equity” basis, but only the purchase of materials and rental of tools or equipment will be considered an Eligible Project Expense. Recipient Paid Fees: None Deadline for Work Completion: All work must be completed within 120 days of the grant closing. Extensions may be granted by CEE due to weather or similar factors. Exhibit A - #2808 Page 4 Agreement between Crystal EDA and Center for Energy and Environment Crystal Interest Subsidy Program Interest Rate: 3% fixed Amortization Type: Amortizing. Closed-end (Monthly Payments Required) Loan Amount: Minimum of $2,000 and Maximum of $50,000. Total Project Cost: The borrower must have sufficient funds necessary to cover the cost of the entire project (as outlined in the bid(s). Additional funds may come from personal savings, gifts, or other loan funds. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the size of the loan and the borrower’s ability to repay the loan. The minimum term is 1 year; the maximum term will be 20 years. Eligible Properties: 1-4 unit owner-occupied properties located within the geographical boundaries of the City of Crystal. Townhomes and Condominiums are eligible, subject to Association Bylaws. Properties may be held in a Contract for Deed. Ineligible Properties: Dwellings with more than 4 units, cooperatives, manufactured homes, time shares, properties held in the name of a trust and properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States, as evidenced by a social security number, Including: U.S. Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens. TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE. Ineligible Borrowers: Including but not limited to: - Businesses, Foreign Nationals, Non-Occupant Co- Borrowers, and Properties held in the name of a trust. Ownership/Occupancy: Owner- occupied only. Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should not exceed 110% of the property value. Half of the improvement value may be added to the initial property value. Income Limit: The property owner’s household income shall not exceed 110% of the HUD Regional Median Income based on household size or the MHFA income limit, whichever is less. Income for eligibility will be determined by the projected income for the next 12 months per MHFA guidelines. Debt - to - Income Ratio: Applicant must have the ability to repay the loan. An applicant who has a debt to income ratio in excess of 48% will be ineligible to receive financing. Exhibit A - #2808 Page 5 Agreement between Crystal EDA and Center for Energy and Environment Credit Requirements: All borrowers must have a minimum credit score of 620 and: 1) All mortgage payments must be current and reflect no 30 day late payments history in the past 12 month period (without reasonable explanation) 2) All real estate taxes must be current. 3) No outstanding judgements or collections (excluding medical). 4) Bankruptcy must have been discharged for at least 18 months prior to loan closing. 5) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 6) Generally, no more than two 60-day late payments on credit report. Any 60 day late requires a documented explanation and reasonable reasons; medical, unemployment, divorce. 7) No defaulted government loans. Multiple Loans per Property: More than one loan per property is allowed, however, the outstanding balance(s) cannot exceed $50,000. Eligible Use of Funds: Same as the current MHFA guidelines Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, non-permanent appliances, and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: Only one bid/estimate is are required. All contractors must be properly licensed Sweat Equity / Homeowner Labor: Work may be performed by property owners on a “sweat equity” basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to rent tools/ equipment or compensate for labor. Loan Security: Determined by MHFA requirements. Borrower Fees: Borrower will be responsible for a 1% origination Fee (which may be financed), mortgage filing and service fees, flood certificate, credit report and any other applicable closing fees. Underwriting Decision: Applicants must have acceptable credit history. CEE will approve or deny loans based on a credit report, income verification and other criteria as deemed necessary through CEE’s underwriting guidelines. CEE’s decision shall be final. Work Completion: All work must be completed within 9 months of the loan closing. Exhibit A - #2808 Page 6 Agreement between Crystal EDA and Center for Energy and Environment General Program Conditions Application Processing: Grants/Loans will be distributed on a first come first serve basis as recipients/borrowers qualify. Applicants must provide a completed application package including the following in order to be considered for funding.  Completed and signed application form  Proof of income  Proof of Identity (drivers license, passport, etc.)  Bids or estimates for proposed projects  Other miscellaneous documents that may be required. Program Costs: Grant/loan origination fees, grants, interest subsidies and post-installation inspection fees will be paid out of the Program Budget. Program marketing efforts will be billed directly to the City of Crystal and is a separate expense should the city choose to commission CEE for marketing support. Total Project Cost: It is the recipient/borrower’s responsibility to obtain the amount of funds necessary to finance the entire cost of the work. In the event the final cost exceeds the original amount, the borrower must obtain the additional funds and provide verification of the additional funds in order to proceed. Disbursement Process: Grant: Payment to the contractor (or owner in sweat equity situations) will be made upon completion of work. An inspection will be performed by a City Inspector and/or CEE to verify the completion of the work. The following items must be received prior to final disbursement of funds: • Final invoice or proposal from contractor (or materials list from supplier); • Final inspection verification by a City Inspector (or CEE); • Completion certificate(s) signed by borrower and contractor; • Lien waiver for entire cost of work; • Evidence of city permit (if required) Interest Subsidy Program: Payment is disbursed to borrower(s) after loan closing Exhibit B - #2808 EXHIBIT B1 TOTAL PROGRAM BUDGET $TBD CRYSTAL PROGRAM BUDGET A. Crystal Grant Budget Allocation (includes Grants plus Set-Up Fee, Post-Installation Inspection Fees and Grant Origination Fees): $TBD MHFA Interest Subsidy Program Budget Allocation (includes Interest Subsidy plus Origination Fees): $TBD Budget Notes: 1. CEE shall submit monthly invoices for origination fees, interest subsidy and post-installation inspections for that period. 2. Services performed by CEE will initially be funded from the Total Program Budget as stated above and paid in accordance with the following schedule. (1) Annual Admin Fee $500 (2) Origination Fee: Grant 15% per grant closed (3) Origination Fee: MHFA Interest Subsidy $125 (4) MHFA Interest Subsidy $varies (5) Post-Installation Inspection Fee $100 3. Marketing Marketing efforts outside of CEE’s website and loan information are not included in the administrative budget. Hourly rates are inclusive of all overhead expenses and will be charged only for hours directly related to the labor of all additional program marketing. CEE will also be reimbursed by City of Crystal for any non-labor, out-of-pocket expenses relating to these services on a dollar-for-dollar basis.